Financial disclosure in divorce proceedings
If you are getting divorced, settling how your finances and assets are divided is often one of the most complex parts of the process. Whether you reach your financial settlement by agreement or you ask the court to make an order because you cannot reach agreement, it is vital that both of you are open and honest about your financial position so that any settlement is fair. This is called disclosure.
Family law solicitors Angela Taylor and Bradie Pell at Malcolm C Foy & Co Solicitors based in Doncaster and Rotherham explain what disclosure is, why it is so necessary and what to do if the other side will not disclose all the relevant financial information.
What is disclosure and when should it take place?
Before court proceedings are issued, a disclosure of financial details should be made voluntarily, either through the mediation process or through solicitors. Once proceedings have been issued this becomes compulsory. There is then an ongoing duty of disclosure. For example, if your circumstances change; such as a promotion with salary increase or you receive an inheritance, details must be given to your spouse. It is best for disclosure to take place as early as possible in the process so that settlement negotiations can begin.
How is disclosure made?
Disclosure is usually made in a financial statement which you sign to say is true. The form is very comprehensive and it needs to be completed as fully as possible, with copy documents attached in support. This will include valuations of properties, 12 months of bank statements for each bank account you have, recent mortgage statement, pension valuations and statements for any loans or credit cards. If you are employed you should attach your last three payslips and most recent P60. If you are self-employed, attach your self-assessment return. If you are a director of a company you will need to provide audited company accounts for the last two financial years. If your finances are complicated you may need to ask your accountant to help you fill it in.
What happens after disclosure?
If financial disclosure is made properly, then looking at both forms will give a complete picture of the matrimonial assets and your financial positions. This will enable your solicitor to advise you on your entitlement and for settlement negotiations to begin. If there are gaps in the disclosure, or you have further questions, you can ask the other party to provide further information.
What if your spouse does not cooperate?
If your husband or wife refuses to answer further questions or to provide accurate information, then it will be necessary to issue a court application. The court will order the exchange of forms and, if this still does not happen, then at the first hearing the court can order what questions should be answered and what further documentation should be provided and by when. If your spouse still does not cooperate, the court can impose a penalty.
Why is disclosure necessary?
Even if the matrimonial assets are limited there should still be some form of disclosure. You may think that you know all the information or that you do not want to push for disclosure but this can be a risk. Once the court makes an order, if you find out that your husband or wife had something of which you were unaware you cannot go back to the court and ask for more. Without a full set of information, your solicitor cannot advise you on whether the settlement you have agreed is a fair and reasonable one.
Whatever your circumstances you should always seek advice from a specialist family solicitor before finalising a financial settlement in divorce to ensure you understand the terms and that it is fair.
If you would like more information about divorce, separation, financial settlements or any other family law matter, contact Angela Taylor or Bradie Pell at Malcolm C Foy & Co Solicitors based in Doncaster on 01302 340005 or in Rotherham on 01709 836866. Alternatively contact us by email at email@example.com or firstname.lastname@example.org
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice, and the law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice on their own particular circumstances. (8th April 2015)