For many clients, the thought of producing financial disclosure in a family law matter is overwhelming and kind of a pain. Nevertheless, financial disclosure is the most important part of the process when dealing with issues of child support, spousal support and property division.
What is Financial Disclosure?
In any family case involving financial issues, both parties should exchange full financial disclosure. The basics of this are:
- A sworn and completed financial statement (whether in court or not). A blank financial statement can be found here at http://ontariocourtforms.on.ca/en/family-law-rules-forms/. Please note that the Form 13 is used for Support-Only claims, while the Form 13.1 is used for claims involving Property and Support.
- Full income tax returns and notices of assessment for the past three years.
- Proof of current year to date income (e.g., most recent paystub showing year to date income).
- For cases involving division of property, proof of the value of all assets and debts on date of separation and date of marriage (or date of cohabitation if not married). This will include:
- Bank Statements;
- House valuations;
- Vehicle Valuations;
- RRSP Statements;
- Life Insurance Statements;
- Business valuations if there is a business;
- Investment Statements;
- Credit card, line of credit and mortgage statements.
- Proof of special or extraordinary expenses for children (e.g., receipts for daycare, sports, medical expenses, post-secondary education expenses).
Further, more complicated disclosure is required in the following situations:
- If a spouse has a business, whether incorporated or not;
- If a spouse depleted joint assets or incurred joint debts post-separation;
- If a spouse is claiming an exclusion (e.g., relating to an inheritance);
- If a spouse is underemployed or unemployed; and
- If a spouse has an interest in a pension.
A lawyer can help you determine what disclosure is needed for your particular case from not only yourself, but from your spouse.
Why is it important?
There are a number of reasons that full financial disclosure is important:
- It is required in any court case. You cannot start a court case or respond to one without a financial statement and certificate of financial disclosure if it involves property or support claims.
- A lawyer cannot properly advise you on support and/or property related claims unless full financial disclosure has been exchanged. As a result, you will not fully know your rights and obligations unless such disclosure has been exchanged.
- An Agreement made without full financial disclosure is at risk of being set aside by a Court if challenged in the future.
When should I do Financial Disclosure and What are Cost-Effective Options?
Financial disclosure should be done as soon as possible after the date of separation so that you can get access to documents in a timely manner. If you wait too long, it may be difficult to obtain the proof that you require.
There are a few cost-effective options in completing financial disclosure:
- Working with a jointly-retained mediator. You and your spouse can retain a mediator to help you in negotiating a resolution to your family law matter (you will still need a lawyer after, or during, mediation to provide you with independent legal advice and prepare the separation agreement). During the mediation process, the mediator can help you and your spouse gather the necessary financial disclosure.
- Working with a jointly retained neutral financial specialist. There are a number of collaboratively-trained neutral financial specialists that assist clients in the Barrie area. A list of them can be found at the following website: https://www.collaborativepracticesimcoecounty.com/locate-a-collaborative-professional-new/. You and your spouse can jointly retain someone (saving costs in the process) and the financial specialist can gather all of the financial disclosure with you and your spouse and provide these documents to your respective lawyers, rather than the lawyers gathering them.
Using mediation and financial specialists do require some cooperation and trust between you and your spouse. If that isn’t possible, then your lawyer can work with you in providing your financial disclosure and obtaining your spouse’s financial disclosure. As a last resort, Court can be used to force someone to provide financial disclosure.