What is Financial Disclosure & Why is it Important for Divorce?
If you are in the process of separating or getting a divorce, you probably would have heard the term “financial disclosure” quite frequently. Are you familiar with it or are you unsure of what purpose it serves?
In this article, we explain what it is and why it is important for divorce.
What is Financial Disclosure in Divorce?
Financial disclosure refers to a process whereby each party discloses their individual finances to the other. It can be done on a voluntary basis or an application to court can be made to set a time for mandatory financial disclosure.
All financial assets and liabilities should be disclosed, including those you do not consider to be matrimonial assets. Main examples of these individual finances are:
- All your current sources of income
- Forecasted budgets and future expenditure
- All your current assets and liabilities
Supporting documentation will also need to be disclosed which can come in the form of:
- Mortgage & Bank Statements
- Payslips & Self-employed Earnings
- Business Accounts
- Pensions & Savings
- Insurance Policies
The Process of Financial Disclosure
Form E needs to be completed and supporting documentation needs to be provided when entering the financial court process. Once these have been completed and exchanged, further questioning can commence, extra documents can be requested and mediation can get underway.
During mediation, there are 5 steps to reaching a financial agreement:
- Both parties making a full disclosure of assets
- Both parties agreeing the financial disclosure between them
- Both parties specifying and approving the marital assets
- Both parties fairly dividing the marital assets
- Both parties agreeing if there are any ongoing payments between both parties and the details surrounding these
Why is Financial Disclosure Important?
In order for your financial agreement in your divorce to be fair, financial disclosure is vital. If you do not clearly disclose all your finances to each other, you will never be sure that your financial settlement on divorce is just. There is also a risk of future legal challenges based on “non-disclosure” if either/both parties have not fully disclosed their finances.
Without full and frank financial disclosure, you will be uncertain of your share you may be entitled to from your ex-partner. This way, you will achieve complete closure and clarity with a divorce settlement based on fact rather than fiction.
What Happens if You Fail to Provide It?
Although you can get divorced without financial disclosure, you are unable to get a financial consent order. These are legally binding, so if you fail to provide complete financial disclosure when sighing a ‘Statement of Truth’ and it is later proven in court you did not disclose all your assets, you run a legal risk. You may have to redo the entire divorce disclosure process again, or you may be fined or imprisoned, the court will decide.
Divorce without financial disclosure labels the party with non-disclosure and could be taken into consideration in any future legal challenges. There is also the risk of the mediation breaking down and leading to financial court proceedings.
How Caversham Solicitors Can Help
The starting point to any financial negotiations is full admission of each party’s financial position. Our Family Solicitors can assist you in this process and offer professional advice right from the beginning through to your statement. Contact us today by emailing info@cavershamsolicitors.co.uk or calling 0800 085 5575.
