Divorce is never easy, especially when it comes to dividing finances. Financial disclosure is a key part of the process, ensuring that both parties have a clear understanding of the assets, debts, and means involved. If you have any questions, please reach out – we’re happy to sit down with you to talk through your concerns. In the meantime, here are some common questions people have asked us about financial disclosure in divorce.
What is financial disclosure, and why is it required?
Financial disclosure is the process of providing a full and accurate account of your financial situation, including assets, liabilities, income, and expenses. It’s required to ensure a fair and transparent division of assets and, where relevant, the calculation of child or spousal support.
What types of financial documents will I have to share?
Typically, you’ll need to provide bank statements, salary slips, tax returns, property ownership documents, and any other records of assets like cars, businesses, or investments. Both spouses must provide complete disclosure for an equitable division.
How far back do I need to go with financial records?
The timeframe for financial records depends on the specific circumstances but generally includes at least the last six months to a year. However, in complex cases, records may go further back, especially if there are questions about hidden assets.
Which assets are typically included in financial disclosure?
Assets such as property, vehicles, investments, retirement accounts, business interests, and even valuable personal items are typically included in financial disclosure.
Should debts also be disclosed, and how are they divided?
Yes, debts are part of the disclosure process. Any outstanding loans, credit card balances, or other liabilities should be declared, as both parties may bear responsibility for these debts depending on the marriage contract (such as in community of property or out of community of property with accrual), and these debts will influence the accrual calculation where relevant.
What happens if one spouse doesn’t fully disclose their financial information?
Hiding assets or providing incomplete information is illegal, and the accuracy of the disclosure should be confirmed under oath. Our courts take a serious view of dishonest disclosure. If discovered, hidden assets may lead to penalties or affect the division of assets.
Will my pension or retirement accounts be part of the financial disclosure?
Yes, pension or retirement savings are generally included. Our divorce law allows for the fair division of these funds, and the “clean break” principle often applies, allowing a spouse to claim a portion immediately after the divorce. This greatly depents on your marital regime and you will usually deal with the division of retirement annuities in a settlement agreement.
Do I need to disclose gifts or an inheritance?
Gifts and inheritances may be excluded, depending on the marriage regime. If you are married in community of property, these assets may be subject to division; in other cases, they might be excluded, especially if they were kept separate. You must also disclose any gifts made during the period covered by the disclosure, to make sure no-one is “partking” assets in someone elseses name pending the divorce.
What should I do if I suspect that my spouse’s financial disclosure is incomplete?
If you believe your spouse hasn’t fully disclosed their assets, speak to us. We can demand further evidence if there’s reason to suspect dishonest disclosure.
Is financial disclosure handled differently in mediation than in court?
In mediation, financial disclosure is still required, but the process can be less formal. The goal is to encourage open and honest discussions to reach a fair settlement without going to court.
Navigating financial disclosure can be daunting, but by understanding these questions, you’ll be better prepared to tackle this essential part of divorce. Always consult with a professional to ensure compliance and fair representation in your financial disclosures. Need help? We’d love a cup of coffee!
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