Smooth Divorce financial disclosure | Expert CDFA & Mediator Guidance

Courts can set aside (in other words not enforce) any separation agreement that does not include full financial disclosure.
Financial disclosure document gathering is a time for precision, not estimation.
Financial disclosure is designed to protect spouses during separation negotiations.
No settlement negotiations can begin until full financial disclosure is made.
Imperative that financial disclosure is comprehensive and accurate.

Comprehensive Financial Disclosure for a Smooth Divorce

In divorce financial disclosure the key to unlocking a smooth divorce is full and frank financial disclosure is required by both parties. Failure to fully disclose can cause delays and increase the cost.

Why do I need to know this?

There can be serious consequences for failure to provide financial disclosure in Ontario family law, from orders to search for known hidden assets, freezing orders, transfer orders and contempt of court proceedings. However, you may be in breach of the civil and or criminal law if you search your spouse’s private documents.

The really big domino

Your head is in a spin, your world turned upside down. Separation can do that to you. It breeds upheaval and uncertainty. What’s going to happen to the house, the kids, your retirement savings, those tax payments? Questions, questions. And on top of all this, your lawyer keeps calling and hassling you about something called ‘financial disclosure’. You’re thinking ‘Really? Right now? Is digging out some old documents really that vital?’

For once, your lawyer is right. financial disclosure in Family Law is crucial to a smooth separation. It’s why I call it the really big domino. Because if it’s not sorted, all else stalls. But once the domino falls out of the way, it serves as the catalyst for a chain reaction that’s the fast-track to more harmony, faster agreements and hopefully a more amicable separation.

In this article, I’ll outline what financial disclosure in family law is and why you need to do it accurately and honestly if you want the most hassle-free separation you can get.

What is divorce financial disclosure?

Put simply, divorce financial disclosure is the part of a separation in which spouses exchange information about their finances. Each is required to complete what’s known as a financial disclosure form. It’s an essential part of any separation as it’s crucial to building-up a picture of the financial situation each party is in.

In essence, it’s an opportunity for both parties to “show their cards”, and requires the submission of supporting documentation that proves things like savings, investments, pensions and other assets each spouse has.

Let’s be straight here – it’s not exciting but it is essential. So be prepared to start digging through those drawers at home for dusty bank statements, credit reports, property deeds and the like. financial disclosure also requires the declaration of the nature of any debts and liabilities you’ve had at three key stages:

On the day you were married (Then)
On the day you separated (When)
At the present moment in time (Now)

Why full financial disclosure in divorce?

Decisions that will affect you and your family’s future will be made based on the financial information you provide, so it’s imperative that it’s comprehensive and accurate. In fact, no settlement negotiations can begin until a full financial disclosure is made. And that makes sense, because all parties need to know the lie of the land if subsequent discussions are to be productive and result in a fair and sensible allocation of assets.

Why are financial disclosures required during divorce?

Such financial disclosures are designed to protect spouses during separation negotiations. They offer the chance for the spouses to show they are prepared to be open and transparent, and to prove they aren’t trying to hide any assets or debts from the other party.

What are the divorce financial disclosure documents that are required?

Your lawyer will be able to give you details but, typically, all of the following are required to be provided as part of financial disclosure:

What happens after financial disclosure – Complete the Financial Statement

For divorce in Ontario, the financial disclosure forms are known as:

Form 13: Financial Statement (Support Claims)

Use Form 13 if you are making or responding to a claim for spousal support, or you are responding to a claim for child support, or you are making a claim for child support in an amount different from the table amount specified under the Child Support Guidelines.

Form 13.1: Financial Statement (Property and Support Claims)

Use form 13.1 for making or responding to a claim for property, an equalization payment or the matrimonial home.

For many, the fact that these forms carry the unlucky number 13 is an irony not lost on them.

Bank Statements
Account statements
Mortgage statements
Credit Card Statements
Property values
RRSP verifications
Values of privately-owned business
A formal pension valuation
Copies of all GICs
Trust document
Income tax returns
Notices of Assessment
Property Appraisals

Time for precision, not estimation

Document gathering is a time for precision, not estimation. There can be no mistakes, no misunderstandings, no secrets. It’s the only way that both spouses can be protected.

After you and your spouse reach an agreement, and before you sign anything, you should get your lawyer to review your financial disclosure, to make sure you’re fully aware of your family’s financial position.

Why some people object to providing financial disclosure

In an ideal world, both spouses would be happy to supply all the necessary financial information for the good of their family and their future. But, of course, things don’t always work out that way. One or both spouses may have objections, and they usually take the form of one or more of the below:

“That information pre-dates our date of separation, so isn’t applicable.”

“My spouse already knows all of this.”

“I don’t want my private details being reviewed by anyone.”

“We are splitting everything on our own terms, so this information isn’t necessary.”

“financial disclosure just seems like a lot of work.”

“I’m concerned that if my spouse or their lawyer sees the real numbers, they’ll come after me for more.”

Will failure to provide financial disclosure affect my separation agreement?

The short answer is yes. It can totally nullify it. The Family Law Act allows the Courts to set aside (in other words, not enforce) any separation agreement that does not include full and complete financial disclosures. That’s bad news because you will have wasted time and money on drawing up a separation agreement that is not legally binding, and you’ll be back to the drawing board. Hopefully, you’re getting the idea that your financial disclosure is the lynchpin of your separation agreement.

Put bluntly, it’s down to each spouse to treat the financial disclosure process with the respect it deserves. And it requires an unerring focus on three key features:

Accuracy
Honesty
Timeliness

Honour all three and you’ll be paving the way for a much smoother divorce process. A more open and amicable settlement that can be reached outside the family court. It usually leads to a longer-lasting agreement too. But fail with any one, deliberately or otherwise, and the consequences could be costly. Mistrust will prevail, and there are likely to be future repercussions. The simple fact is the truth will out in the end. So you might as well tell the truth in the beginning.

What failure to disclose financial information in divorce can do:

There’s a price to pay for failure to provide complete financial disclosure in the separation and divorce process:

financial disclosure in Separation and Divorce

Delay Proceedings

DELAY – proceedings can be held up by failure to make full and complete financial disclosure. Sometimes this is unavoidable; after all, many banks only hold data for up to 8 years. Delays also occur when documents that weren’t requested are submitted by either or both parties, which will result in a call from your lawyer querying the submission (more about that later).

Damaged Reputation

DAMAGE – lack of honesty and transparency during separation can damage the reputation of a spouse and spoil the spirit of goodwill that’s hopefully pervading around the separation. A spirit of goodwill is what is required to complete a separation in good time.

Generate delays and additional fees

DISRUPTION – lawyers are likely to chase-up spouses who haven’t provided full financial disclosure or the associated documents that are required (or ones that aren’t required), and this could generate delays and additional professional fees and a costs award.

Imprisonment, warnings, fines

DETENTION – in extreme cases, being deliberately dishonest on your financial disclosure form can result in imprisonment. More often, the punishment takes the form of verbal warnings or fines. Make no mistake, it’s a serious offence, because by signing the financial statement for family court, you are completing a sworn statement which is akin to being under oath in court.

A delayed financial disclosure case study

In Blaney v Blaney, the Ontario Superior Court of Justice ordered the husband to pay costs because he continually delayed providing financial disclosure. You have been warned!

Why is financial disclosure so expensive?

financial disclosure takes time and costs money. Every document you submit to your lawyer, you will be charged for, even if you submit a document that’s rejected for being irrelevant, as it will involve your lawyer looking at the document, writing to you and asking you to resubmit the correct document. That alone could cost you $200.

Finding the documents required is a tedious process. Often, people are asked to look for these things while their lives are in a state of disarray. They’re angry about what’s happening to them or frightened about what might happen. They’re not thinking straight, and digging out documents isn’t what they want to be doing. But it needs to be done to shift that domino.

It would help if spouses were told by their lawyers what’s required, where they can find the documents and the relevance of each document. Details are essential in financial disclosure in divorce, because without them, your final separation agreement may not properly take into account all the assets, liabilities and necessary tax considerations.

And yet, so often, corners are cut and the full picture not revealed. This simply sows the seeds for future problems. Spouses are forced to call their lawyers to seek clarification, or lawyers will chase-up their clients to see how the document hunt is going and if you’ve found that missing one yet. And guess what? Your lawyer will be charging you for every call.

What makes financial disclosure the Big Domino?

As you can hopefully see, financial disclosure is the foundation upon which family law is built. It underpins the validity of contracts and is required for any agreement to be considered legally binding. Sometimes, it’s the only thing that convinces parties involved in separations to have faith in the negotiation process. So nothing happens until the big domino of financial disclosure gets knocked down. When it falls, it sets off a chain reaction of communication, discussions, negotiations and, ultimately, a mutually accepted separation agreement.

How to avoid some of the costs of financial disclosure in family law

Obviously, preparation is key, and if you keep accurate and well-organized accounts at home, your task will be that much easier when it comes to finding the documents you need.

Either way, your lawyer will assume that every document you provide will be challenged by your spouse’s lawyer, so you must submit the entire document, even if you think some of the pages look irrelevant. They might be crucial to your lawyer, and not submitting them will cause delay, and remember, delays cost you money.

Financial disclosure In Mediation

When you enter mediation, certainly with us here at Divorce the Smartway (DTSW), time will be spent during your sessions on educating you on the importance of financial disclosure. During my mediation sessions, you will be provided with the appropriate reference materials, including videos and access to our very own financial disclosure Wiki and interactive portal.

We use the standard court forms as mentioned earlier – those unfortunately numbered Forms 13 and 13.1. We also build the forms into some of the most advanced settlement analytics known in the industry. Using these will help you reach a settlement faster, with more clarity and certainty.

15 Top Tips And The Documents You Require

And to help build your understanding of financial disclosure still further, here at DTSW, we have created an ebook that you can download for free. It’s called: “How To Save Money On financial disclosure In Divorce: 15 Top Tips And The Documents You Require”. You can download your copy here.

Should you wish to discuss financial disclosure further, or anything else associated with your separation, including getting mediation in the Greater Toronto area, please contact me, Ken S. Maynard at Divorce the Smartway

Conclusion

One of the most critical parts of divorce or separation is the proper and transparent disclosure of family finances. Achieving a fair and equitable division of family property requires a thorough understanding of each party’s assets and liabilities. This process includes the examination of tax returns, property valuations, investments, and any other relevant financial information. By revealing all relevant financial details to each other, both parties can work towards a resolution that respects their individual needs and goals.

Understanding Financial Disclosure in Divorce

Financial disclosure is providing complete and accurate information about your assets, liabilities, income, and expenses during the divorce process. This information is essential for determining how to divide family property and calculate support payments equitably. Both spouses legally have to be transparent with each other regarding their financial situation, including sharing tax returns and any other relevant documents.

Importance of Financial Disclosure in Divorce

Full financial disclosure is crucial for a variety of reasons:

It ensures a fair division of family property. By revealing all relevant financial information to each other, both parties can work together to create a settlement that accurately reflects the value of their family assets and liabilities.
It helps to establish trust between the parties. Open and honest communication about family finances is essential for maintaining a sense of goodwill and cooperation throughout the divorce process.
It is required by law. In most jurisdictions, both parties legally have to provide full financial disclosure during the divorce process. Failure to do so can result in penalties or even the reversal of a divorce settlement.

Key Components of Financial Disclosure

To make sure your financial disclosure is comprehensive and correct, it is essential to include these components:

Assets and Liabilities: A complete list of all assets and liabilities, including real estate, investments, retirement accounts, and debts, should be provided. Correct valuations of these assets and liabilities are crucial for a fair division of family property.
Tax Returns: Copies of your most recent tax returns should be shared with each other to provide a clear picture of your income and financial situation.
Income Statements: Documentation of your current income, such as pay stubs or statements from your employer, is necessary to determine support payments and ensure an equitable division of assets.

Seeking Professional Help with Financial Disclosure

Navigating the complex world of financial disclosure can be challenging, especially during the emotional upheaval of a divorce. By seeking the help of professionals like Certified Divorce Financial Analysts (CDFAs) and mediators, you can ensure your financial disclosure is thorough, correct, and in compliance with the law. With the guidance of experienced professionals, you and your spouse can work together to create a fair and equitable settlement that protects your financial future.

Settling a separation requires expertise and understanding to ensure the process is fair, efficient, and as amicable as possible. As both a Mediator and a Certified Divorce Financial Analyst (CDFA), I am uniquely equipped to provide you with the support and guidance needed during this challenging time. My Soft Landing Settlement Method is designed to address both the financial and emotional aspects of your separation, helping you and your spouse find common ground and reach a resolution that benefits both parties.

With the Soft Landing Settlement Method, I will walk you through every step of the process, ensuring transparency, open communication, and a thorough understanding of your financial situation. By working together, we can create a tailor-made settlement plan that prioritizes your needs and goals, setting you on the path toward a secure and peaceful future.

Don’t navigate this complex journey alone. Schedule a Get Acquainted Call with me today to discuss your specific circumstances and learn how my expertise and the Soft Landing Settlement Method can help you achieve a smooth and fair separation.

Schedule a Get Acquainted Call

Inspection of Documents

Inspection of Documents: This is a part of the discovery process in which the other party has a right to observe and create a copy of the documents of the other party that relate to the issues in the legal action.

What is discovery and inspection of documents?

Here is a video you may find helpful

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Feedback & Your Questions

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Question? Go ahead ask Ken!

since you’re here…

Do you value fair costs, compressed timelines, your well-being and a favourable outcome?
If you have children, are approaching retirement, or simply in the primary pursuits of life, no matter what your station in life, separation and divorce often presents some unique challenges. That said reaching a settlement should not break you financially or break your family. Like life, Separation and divorce also have their stages. The early decisions you make and the path you take are directly connected to the quality of your outcome.

The path you take

Let’s hear from Divorce Industry insiders about lawyers and litigation.

“Entering the litigation process forces people to take an adversarial stance because that’s the way the system is designed.”

“Because a court can only do so many things, the answers are impeaching us already. Has to be custody, has to be access, has to be amount of support, has to be division of assets, in a way that the law stipulates. So they’re very bounded by the results because a court can only order so many things.”

“Lawyers unfortunately because that’s their job, tend to reinforce that [adversarial stance]. When you have people who are hurt, who are in crises, who are afraid, who are worried, and they see it as a war. And that’s really dreadful for kids”

June Maresca – Family Court Judge

“The process requires people to bring out the worst in each other. My ex-husband is like this and like that, all the most horrible things. My ex-wife is like this and like that, it brings out the worst in people. So the other party reading that gets their back up and retaliates.”

“She said I knew that our marriage was broken, but after the litigation our family was broken. And it just, it broke my heart.”

Toni Pietrantoni – Family Law Lawyer

“Once you thrown mud at somebody and they throw mud back at you, it typically gets to the point where the hate level does not decrease, the hate level increases.”

“When I see litigation, it’s based on a binary system. You either win or you lose, or on an issue, you’re right or you’re wrong.”

Richard Bennett – Family Law Lawyer

“And at one point my mom said well you have to choose who you’re going to live with, me or your dad. And I couldn’t study for about a good two months and we had finals coming up, so it was difficult.”

Child of Divorce

“The time has come for a fresh conceptual approach to resolution of family disputes in Ontario”

Warren Winkler – Ontario Chief Justice 2007 – 2013

“The empirical evidence shows that it isn’t necessarily the separation and the divorcing of parents that creates the psychological and emotional damage in children, it is the conflict that happens afterwards.”

Julia Haasz – Family Law Lawyer

“The litigation process is expensive, time-consuming, and it’s not going to have the effect people think it’s going to have.”

Francine E. Van Melle – Family Court Judge

What about Self-Representation?

The family court system has seen a terrific increase in the number of self-represented litigants (self-reps, or SRLs) over the past few years. But what does it mean to be a self-rep? Judges and lawyers, as well as the system itself, are all struggling to understand who how to better accommodate self-reps in a system built upon the expectation of both parties having lawyers to act for them.

The National Self-represented Litigants Project revealed some disturbing figures. Over a period of 4 years and 3 months ending April 6, 2016, in Ontario Superior Court cases where there was one self-rep and one represented client, the self-rep won only 14% of the time and lost 73% of the time. (The remainder resulted in no orders or split orders.) While there are many explanations for this, it’s clear that a person without any legal help or assistance is facing an uneven playing field.

The resolution value ladder

The further down the resolution value ladder you start, the higher cost go, and the longer timelines extend. Bypass low-value processes and start with the high-value mediation process. Whether you have a settlement in mind and just need a separation agreement prepared or need assistance reaching a settlement, contain costs and conflict by working with a neutral third-party – mediator.

Learn more about Soft Landing Divorce Settlement Method

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“Research tells us the greater the degree to which the parents own the outcome, the greater the likelihood they will actually follow through, and that reduces the conflict.”

“People are like snowflakes, families are like snowflakes. No two are the same. And so the benefit of a collaborative process, there is no rubber stamp, there is no template that anyone has to fit in to”

Gary Direnfeld Social Worker MSW, RSW

About the Author:

Ken Maynard CDFA, Acc.FM

I help smart and successful couples, create separation agreements with clarity and soft landings for secure futures, in 4 meetings or less without all the lawyer created overwhelming conflicts, confusion and costs. You can work with me by video conference or with a DTSW associate at any of our 6 DTSW Greater Toronto mediation centers, including | Aurora | Barrie | North York | Vaughan | Mississauga | Scarborough.

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