How to have a smooth Divorce – Get past the Financial disclosure

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.

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)

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.

Such 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.

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.

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.”

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.

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 disclosure gets knocked down. When it falls, it sets off a chain reaction of communication, discussions, negotiations and, ultimately, a mutually accepted separation agreement.

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.