Smooth Divorce Financial Disclosure | CDFA Guidance
After financial disclosure, then complete the Financial Statements
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.”
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 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.
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.
- 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
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)
If your ex-spouse is delaying the financial settlement, you can request the court to order them to comply with the necessary financial disclosure. Legal measures can be taken to ensure that the process moves forward, such as setting deadlines or appointing a third party to gather the required financial information. This action helps to avoid unnecessary delays in
Yes, you have to provide your tax returns as part of the financial disclosure process in a divorce. Tax returns are crucial for assessing income, which is a key factor in determining spousal and child support obligations, as well as in the division of assets.
No, completing financial disclosure is a necessary step in the divorce process in Ontario. It ensures that all financial assets and liabilities are fairly considered and divided. Divorcing without financial disclosure can lead to an unfair settlement and possible legal challenges in the future.
Form 13.1 Financial Statement should be completed with detailed accuracy. It requires information about your assets, liabilities, income, and expenses. It’s advisable to consult with a Certified Divorce Financial Analyst or a lawyer to ensure that the form is filled out correctly and thoroughly, reflecting your financial situation comprehensively to avoid any potential issues during the divorce process.
No, you cannot refuse financial disclosure in a divorce in Ontario. Refusing to disclose financial information can lead to legal consequences, including penalties or the court making decisions based on the available information, potentially to your disadvantage.
Typically, six to twelve months of bank statements are required for divorce proceedings. However, the exact period can vary based on the specifics of the case and any discrepancies that may need to be addressed.
Yes, financial disclosure is required for divorce in Ontario. It ensures that the division of assets, child support, and spousal support are based on accurate and complete financial information, allowing both parties to reach a fair settlement.
Yes, you typically have to show bank statements in a divorce as part of the financial disclosure process. These documents provide essential information about your financial status, including income and expenditures, which are important for determining support payments and asset division.
Financial disclosure in divorce involves both parties providing full and frank details of their financial assets and liabilities. This includes income, properties, investments, debts, and other relevant financial information. The aim is to ensure that all financial matters are transparent, facilitating fair negotiations and settlements.
After financial disclosure in a divorce, both parties have a clear overview of each other’s financial situations. This transparency allows for equitable negotiations regarding asset division, child support, and spousal support. Completing this step is crucial for making informed decisions and finalizing the divorce settlement fairly.
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:
Ken Maynard CDFA, Acc.FM
I assist intelligent and successful couples in navigating the Divorce Industrial Complex by crafting rapid, custom separation agreements that pave the way for a smooth transition towards a secure future. This efficient process is achieved in about four meetings, effectively sidestepping the excessive conflicts, confusion, and costs commonly linked to legal proceedings. Clients have the flexibility to collaborate with me either via video conference or in-person through a DTSW associate at any of our six Greater Toronto mediation centers, located in Aurora, Barrie, North York, Vaughan, Mississauga, and Scarborough.
