Why is Financial Disclosure in Family Law Proceedings Important?

Financial disclosure is not a concession or a show of weakness. It shows good faith willingness to comply with the law and can set the tone for negotiations and court proceedings. 

Financial Disclosure is Fundamental to Family Law

The duty to disclose financial information is the most basic obligation in all of the family law.
Complying with financial disclosure obligations can reduce costs and allow the parties to resolve their disputes without going to court. 

What are the Requirements of Financial Disclosure?

Parties must submit their financial information in cases involving claims for support, property or for exclusive possession of a matrimonial home and its contents. Financial disclosure must be made in cases where a party is negotiating a Separation Agreement and/or as part of a court application.

In such a case, the parties must submit a financial statement, typically at the outset of a court case or negotiations pertaining to out-of-court separation proceedings. They must provide substantial supporting documentation with their financial statement including but not limited to:

  1. The last three years of income tax returns and notices of assessment; 
  2. Their most recent statement of earnings such as a paystub; and
  3. Supporting documents to confirm the values of all property owned by the party on any of the relevant dates, which typically include the date of marriage, the date of separation and the present day.

This information should comprehensively demonstrate a party’s financial situation as at the relevant dates. 

What are the Benefits of the Financial Disclosure Requirement in Family Law?

  1. Proactive financial disclosure can avoid costly proceedings over inadequate disclosure; 
  2. Early financial disclosure can show good faith and a willingness to cooperate and foster such sentiment from the other party in negotiations; 
  3. Although not guaranteed, proactive disclosure frequently leads to the faster settlement of a case; 
  4. Proactive financial disclosure that facilitates good faith, amicable negotiations and settlement can also prevent the non-financial negative consequences of protracted matrimonial litigation. 

What are the Consequences of Not Complying with the Financial Disclosure Requirements? 

  1. Court staff will not accept documents for filing without the required financial disclosure;
  2. With exceptions, a party cannot obtain a hearing or conference with a judge without financial disclosure; 
  3. Failure to comply can lead to costly consequences; 
  4. Non-compliance with court orders requiring financial disclosure can lead to claim or answer or other document filed by a party being struck; 
  5. Inadequate financial disclosure in negotiating a domestic contract can lead to that agreement being set aside by a court; and
  6. Inadequate financial disclosure can impact the credibility of a party’s case, including creating the perception that a party has something to hide. 

Takeaway

When retaining a family lawyer dealing with property and/or support issues be prepared to provide your lawyer with your financial information and supporting documentation for the purpose of cooperating with your financial disclosure obligations. 

For more information on financial disclosure obligations or any other family law matter, you can arrange a consultation with one of our family law lawyers by calling: 519-621-7260.

Post prepared by

Simon A. Marmur, Associate Lawyer | Pavey Law LLP | T. 519.621.7260, Ext. 227