Financial Disclosure in a Divorce Proceeding

Financial Disclosure in a Divorce Proceeding

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As if going through a divorce isn’t tough enough, the added burden of financial disclosure can be a very overwhelming task to many people.

Financial Disclosure Explained:

Any Toronto Family Lawyer will tell you that financial disclosure is one of the most important steps in a divorce proceeding. The rule requires that full and frank financial disclosure be provided by both parties in the divorce. This is done by way of sworn financial statements, which must include all supporting documentation, like bank statements, life insurance policies, and loan agreements, just to name a few. The forms to be used for the financial disclosure are determined by whether the divorce proceeding includes both the issues of division of property and spousal support, or just spousal support on its own.

Why It’s Important To Make Full And Frank Financial Disclosure:

If you fail to provide the information that is requested by your spouse’s lawyer, or that is required by the Family Law Rules, then you’re likely setting up a scenario that’s going to cost you a whole lot of money down the road. There are a couple of reasons why this is the case: firstly, if the opposing lawyer has asked you for specific documentation, they probably have a good reason why. Usually, it’s because they suspect you’re concealing funds or assets, and they’re not likely to back down. If you refuse to provide them with it, then they’re likely to drag the matter before a judge to seek an order compelling you to produce the said document. This will cost you plenty in legal fees, court costs, and the opposing lawyer’s fee; secondly, if your lawyer requests a certain document from you, but you fail to provide them with it, then a conflict is likely brewing on the horizon. Not only are you likely to raise the ire of your lawyer, but you’re also going to get billed for it. Every time your lawyer has to review your file for completeness, or incompleteness in this case, they’re going to bill you for it. In addition, the advice you receive from your lawyer will not be based on your actual financial position, and as such, may end up causing you more harm than good.

What Legal Forms Will I Need To Make Full And Frank Financial Disclosure?

After selecting the right starting form (division of property & spousal support, or just spousal support), you’ll need to locate several pieces of supporting documentation, which include:

·         Income tax returns for the previous three years.

·         Notice of Assessments for the previous three years.

·         A photocopy of your most recent pay stub (if applicable).

You’re likely going to be required to provide much more supporting documentation than what is enumerated above, like bank statements showing any outstanding debts that you had on the day of marriage. Your lawyer will advise you on exactly what additional documentation is required.

Why Transparency Is The Way To Go:

If you’ve entered into a separation agreement with your former spouse, then it will be based on the financial disclosure that you’ve provided. What you need to understand here is that a separation agreement is a legally binding contract, and as such, if it is based on inaccurate figures or deflated amounts, then the contract is voidable. In fact, one of the main reasons the courts set aside separation agreements when challenged by a litigant is due to incomplete financial disclosure by one of the parties.