One of the prerequisites of divorce proceedings in Canada is providing full and frank financial disclosure.

While, for most couples, this will not pose too many difficulties in concept, it can sometimes be challenging to capture all of the information that divorce lawyers and the family court system require. 

Identifying which particular assets and liabilities merit disclosure can sometimes be confusing.

Why Financial Disclosure is Important During Divorce Proceedings

In some divorces, one spouse may attempt to hide assets from the other, often leading to disputes, delays, and extra expenses.

Being prepared with full disclosure, and receiving the same from your former partner, is a critical first step in resolving any family law dispute. Understanding the importance of financial disclosure and the corroborating documentation you need to provide will mean one less surprise for you during a potentially lengthy family law or divorce process.

The Importance of Financial Disclosure

Your financial circumstances at the time of separation and divorce have a significant effect on many of the important issues that must be resolved between you and your former spouse.

The division of matrimonial property, child support, and spousal support all depend on the financial circumstances of you and your spouse.

This is why it is essential to be able to produce a clear picture of your finances for lawyers, mediators, arbitrators, and/or judges – depending on the nature of your divorce. You achieve this by providing accurate documentation..

Without full and frank financial disclosure, those who attempt to help you reach a divorce settlement with your spouse will be working without a full understanding of what is fair and reasonable in your circumstances.

For instance, in order to prepare a reasonable proposal for the division of assets, the professionals assisting you must know the full value of all assets and liabilities at the date of separation compared with the full value of assets and liabilities at the date of marriage. 

Remember, matrimonial property refers to assets accumulated during the marriage but there are some notable exceptions, such as gifts or inheritances received during the marriage.. Your lawyer will, therefore, need to understand your finances in fine detail. 

Essentially, your lawyer will need to break everything down before putting it back together again in two separate columns – one for you and one for your spouse.

Divorce lawyers use their experience in similar divorce situations to advise you on how everything will be divided and may need to hire professional valuers to arrive at accurate estimates of some assets.

To provide calculations for child support and spousal support, your lawyer will need to know the respective incomes of both spouses. Again, full disclosure is essential. There are relatively simple formulae to use that will provide an estimate for these support payments, but the income inputs must be accurate and precise.

Detailed and accurate statements will need to be provided to your spouse (and received from them) whether you negotiate, mediate, arbitrate, or litigate your matter to resolution.

If further, previously undisclosed financial information comes to light after a separation agreement has already been signed, one of the parties can apply to the court to have the agreement set aside.  Similarly, if a court order is made and additional, undisclosed financial information is discovered, one party can apply to have the order changed based on new information that was unavailable before.

The extra delays and expenses associated with this (including legal fees, retroactive payments, and potential court costs) should discourage a willful lack of financial disclosure by separating spouses.

What Documents Should You Prepare?

It is not always clear what documentation you need and which assets should be included with your financial disclosure. 

And financial disclosure is often more complex for couples who have lived together for many years or for high-net-worth individuals.

Most divorce lawyers will provide you with a list of documents that you need to assemble. Full financial disclosure generally includes a sworn financial statement supported by a disclosure document brief containing details of backup documents that help to verify the information listed in the financial statement. 

Some of the key documents you should prepare for full financial disclosure include: 

  • A recent mortgage statement for each property that you own
  • A valuation (or opinion of value) for properties that you own
  • Your bank and credit card statements (include all accounts in your name)
  • Your income tax returns (for the past three years)
  • Your notices of assessment (for the past 3 years)
  • The Family Law Value of any relevant pension plans 
  • Life insurance/endowment surrender value quotations

Be aware that if you own a business, further corporate disclosure will be required so that your business assets and liabilities can be considered as part of the settlement.

You may need to provide the following, but your lawyer will confirm:

  • Corporate tax returns
  • Corporate financial statements 
  • Corporate ledgers
  • Minute books 
  • Bank statements

How To Prepare Full Financial Disclosure

Providing full financial disclosure to your spouse or your spouse’s lawyer upon request is an obligation that must be fulfilled.

However, you do not have to handle the process alone. An experienced divorce lawyer at Amiri Family Law can help you prepare your financial statement, meet your disclosure obligations, and prevent any unnecessary stress, delays, and expense with your divorce proceedings.

Remember, if full disclosure is not provided and any material discrepancies are discovered later, the matter may return to the courts, causing additional expense and stress.

We can help you reach a settlement that keeps you out of the courts. Start with a free consultation to help us evaluate your case.