Financial disclosure in divorce; Parties going through a divorce are under a duty to provide full, frank and clear financial disclosure.
What is financial disclosure in divorce?
Financial disclosure in divorce is the process of giving your spouse, and the court, full details of your personal financial circumstances and your future needs and resources.
Why is financial disclosure necessary in divorce?
Financial disclosure is usually the first thing a family lawyer will ask their client to provide, as they will be unable to advise properly about the likely outcome of their client’s case without having a full picture of where both parties are placed financially. The court will also need full disclosure to consider how to distribute the parties’ assets and income.
How can I provide financial disclosure?
Financial disclosure can be undertaken on a voluntary basis or by directed by the court following the issue of a financial remedy application. If a financial remedy application has been issued the court will direct you to complete a financial statement Form E. You must attach to Form E documents such as wage slips, bank statements, valuations for property, mortgage statements, business accounts and pension valuations.
Outside of court (where parties are having discussions between themselves, negotiating through solicitors, or using mediation), parties can agree to use Form E, or they can complete a shortened disclosure process using schedules of the Statement of Information Form D81. Form D81 doesn’t require any documents to be attached and simply sets out in summary format parties assets, liabilities and income. THIs form must be filed with a consent order and provides a summary of the parties financial circumstances for the judge to understand the terms of their settlement and approve the consent order.
What happens if my spouse fails to provide information about their assets or deliberately distorts their financial position?
It is possible to ask the court to reopen a case and make a new order if a court order or agreement reached within or outside court proceedings is later found to have been based on inaccurate information. Parties have a duty to provide full, frank and clear financial disclosure whether within the context of informal and voluntary discussions and negotiations or as part of financial remedy proceedings.
If a party is in breach of the duty, whether by failing to disclose certain relevant facts and circumstances or actively presenting a false case then the court may make adverse inferences, set aside the substantive financial order, and can make a costs order against that party. Giving deliberately false information in a Form E can also result in other sanctions such as criminal prosecutions and civil contempt of court as the Form E is verified by a statement of truth.
What happens if my spouse tries to hide assets?
You can apply to the court for a search order or freezing injunction if there are concerns regarding the dissipation of assets, concealment of information or destruction of documents. You would need to prove that the other party has acted in this way with the intention to defeat financial remedy claims.
A search order allows one party to enter premises to search and remove evidence before the other party has an opportunity to destroy the evidence. A freezing injunction prevents the suspected party using their assets such as money in a bank account.
If you think your spouse may be acting dishonestly you need to act quickly to obtain the permission of the court to search for their confidential documents or freeze their assets. However, the cost of applying for and carrying out such an order must be balanced against the potential benefits, and it is important to discuss these considerations carefully with your legal adviser before proceeding.
When does the duty to provide disclosure end?
The duty is ongoing and only ends once the court has made a substantive order. This means that both parties will need to ensure that their disclosure is up to date and any material changes to their financial information or personal circumstances (for example, an intention to cohabit, remarry or form a civil partnership) must be disclosed.
Written by Faye Wright
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