The Role Of Financial Disclosure in Divorce Proceedings
Divorce can be a difficult and emotional process, and one of the biggest challenges is dividing up assets and liabilities between the two parties.
In England and Wales, there is a legal requirement for both parties to provide full and frank financial disclosure during the divorce process.
This means that each party must provide a comprehensive list of all their assets, liabilities, income, and expenses.
What is Financial Disclosure? (Quick overview!)
Financial disclosure describes the process of each party to a divorce providing financial details such as your income, assets, and any liabilities.
Financial disclosure is made through Form E, which is a detailed document outlining the overall ‘matrimonial pot’.
It helps the court assess the financial resources of both parties and make decisions regarding the division of assets, payment of maintenance, and other financial arrangements.
What is the purpose of Financial Disclosure?
The purpose of financial disclosure is to ensure a fair and equitable division of assets and to prevent one party from hiding assets or income from the other.
Irrespective of your financial circumstances, it’s vitally important that you address it as part of your divorce as the Final Order does not end your ties – it merely ends the marriage contract.
If you have limited assets to separate, you may be able to obtain a clean break order. For longer marriages, this may not be possible and financial disclosure becomes even more important.
Financial disclosure is required by law, and non-disclosure or providing false information in the disclosure process can have serious legal consequences.
The court can set aside any agreement or order that is made if it is later discovered that one party failed to provide full disclosure of all their assets or income.
In extreme cases, a party can even be held in contempt of court, which can result in fines, imprisonment, or both.
So, why is financial disclosure so important in divorce proceedings in England and Wales?
Here are some reasons:
1) To ensure a fair and equitable division of assets
When you get divorced, your assets and liabilities will be divided between you and your ex-spouse.
This can include everything from property and investments to bank accounts and pensions.
In order to ensure a fair and equitable division of assets, it’s important that both parties provide a comprehensive list of all their assets and liabilities.
This allows the court to make an informed decision about how to divide the assets.
2) To prevent one party from hiding assets or income
Unfortunately, some people may try to hide assets or income from their ex-spouse during the divorce process.
This can be done by transferring assets to friends or family members, or by failing to disclose all their income.
By requiring full and frank financial disclosure, the court can prevent one party from hiding assets or income, and ensure that all assets are included in the division of assets.
3) To ensure a Consent Order reflects the financial arrangements accurately
A Consent Order is a legal document that sets out the financial arrangements between you and your ex-spouse after your divorce.
It’s important that the Consent Order accurately reflects your financial arrangements, as it is a binding legal document.
In order to ensure that the financial order is accurate, it’s essential that both parties provide full and accurate financial disclosure.
4) To avoid future disputes
Finally, full and accurate financial disclosure can help to prevent future disputes between the parties.
By providing a comprehensive list of all assets and liabilities, both parties can be confident that the division of assets is fair and equitable.
This can help to avoid disputes in the future and can ensure that both parties can move on with their lives.
In England and Wales, financial disclosure is required by law during divorce proceedings.
It’s important to work with a family law solicitor to ensure that you provide full and accurate financial disclosure, and to ensure that the division of assets is fair and equitable.
This can help to prevent future disputes and can ensure that both parties can move on with their lives after the divorce.
If you have any questions or concerns about financial disclosure or the divorce process, don’t hesitate to contact a family law solicitor for guidance and support
What Financial Information Do I Need To Disclose?
The financial statement you need to complete is known as Form E; it’s a long and often complex document.
If you would prefer to complete just one simple online questionnaire then speak to us on live chat to find out how our service streamlines the process.
- Income: Both parties should disclose their sources of income, including employment income (payslips), rental income, dividends, and any other forms of earnings including bank statements.
- Assets: List all assets, such as properties, investments, savings accounts, pensions, business accounts, and valuable possessions.
- Liabilities: Disclose all debts, loans, mortgages, and other financial obligations.
- Expenses: Provide information about regular expenses, including housing costs, utilities, childcare expenses, and more.
Judges have the discretion and power to reject a consent order application.
This could be due to one party not being honest about their finances and therefore, the court cannot grant an order because they don’t have all the facts.
Common Questions on Financial Disclosure
- Can I refuse financial disclosure? You can refuse financial disclosure, however, it is not advisable. Refusing to share financial information could mean your ex-partner has no option but to apply for a financial order through the court. This can be very expensive and drawn out, taking over 12 months in some cases.
- Is financial disclosure required for divorce? No, financial disclosure is not required for divorce. It is advisable to apply to the court to end your financial ties following a divorce as it prevents any future claims by either party, however, it is not a legal requirement.
- What happens if my husband refuses financial disclosure? If your ex-partner refuses to provide full and frank financial disclosure, you are likely going to need the assistance of a mediator or solicitor. With the help of these experts, you can ask questions and request extra information during the court process.
Seeking legal advice from experienced family solicitors is crucial throughout the divorce process, especially when navigating the complexities of financial disclosure.
Solicitors can provide guidance on the legal requirements, help clients gather the necessary documents, and negotiate on their behalf to reach a fair settlement.
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