How does financial disclosure work in divorce?

Financial disclosure during divorce or separation involves providing detailed information about your financial situation, including your assets, resources, and future financial requirements.

Typically, this information is exchanged between you and your partner. However, if financial remedy proceedings are initiated, copies of this disclosure must also be submitted to the family court.

Financial disclosure aims to ensure transparency and enables both parties and the court to make informed decisions regarding financial matters related to the divorce or separation.

In this blog, we cover:

• What is financial disclosure during divorce proceedings?
• How does financial disclosure work?
• What types of financial information are typically required for disclosure?
• Are there any legal consequences for hiding assets during divorce proceedings?
• What happens if there are disputes regarding the accuracy or completeness of financial disclosure?

What is financial disclosure during divorce proceedings?

A financial disclosure statement during divorce proceedings involves filling out documents to explain your financial status.

Whether you’re handling your divorce through solicitors, mediation, or in court, both parties must share information regarding all assets and debts openly.

This allows your divorce solicitors to determine if the settlement is fair and reasonable. It's important for both spouses to disclose all financial information, including assets like property, investments, and pensions, as well as debts such as loans.

Without accurate disclosure, there's a risk of unfair outcomes or legal issues arising.

How does financial disclosure work?

Financial disclosure in divorce proceedings works by sharing information about each party's financial situation and providing evidence. This process is typically carried out by completing a form called Form E, which the court may ask for if an application is made for a judge to decide asset division.

While Form E is used in the court system, it's also commonly utilised even when parties choose to settle matters outside of court, such as through direct negotiations, mediation, or solicitors.

This form serves as a comprehensive tool for documenting assets, income, expenses, and liabilities.

By exchanging this information, both parties gain a clear understanding of their finances, aiding in negotiations and ensuring transparency.

Financial disclosure using Form E facilitates fair and informed decisions regarding the division of assets when filing for divorce.

What types of financial information are typically required for disclosure?

Form E includes information about property values, outstanding mortgage balances, bank account details, savings, investments, and other financial accounts.

Liabilities such as debts are also disclosed, along with income details and business valuations. Importantly, pension cash equivalent values are also included in the disclosure process.

Once completed, Form E will be exchanged between parties, ideally at the same time. This exchange allows both parties to review the disclosed details and request further evidence or clarification if needed.

The primary aim of this process is to ensure that both parties have a thorough understanding of each other's financial circumstances and to prevent the concealment of assets or suspicious transactions. By disclosing this information transparently, divorcing couples can work towards a fair resolution.

Are there any legal consequences for hiding assets during divorce proceedings?

Hiding assets during divorce proceedings can have severe legal consequences. Apart from complicating and prolonging the process of reaching a divorce financial settlement, the court may impose various penalties if they discover it. These penalties might include paying court fees and the expenses of the other party, or even facing charges of contempt of court. Individuals found to have concealed assets could also be required to cover all legal costs and could receive a less favourable financial settlement.

If the concealment is uncovered later, the court has the authority to revisit the original settlement and make significant alterations. In extreme cases, hiding assets may result in criminal charges and a criminal record.

It is advisable for both parties to seek guidance from family law specialists, to navigate financial proceedings legally during divorce.

What happens if there are disputes regarding the accuracy or completeness of financial disclosure?

In cases where disputes arise regarding the accuracy of financial disclosure in divorce proceedings, it's important to reach out to an expert divorce solicitor to secure the best possible outcome.

Typically, divorce solicitors advise pursuing voluntary disclosure of assets initially. However, if there are suspicions that a former spouse is not fully disclosing their assets, it may be necessary to initiate legal proceedings.

By doing so, you may gain the ability to request court intervention and potential sanctions for non-disclosure. In more serious instances, a penal notice may be attached to the requirement for divorce financial disclosure, and persistent breaches of court orders could lead to severe consequences, including imprisonment.

Deceptive behaviour can also significantly impact the division of assets, potentially disadvantaging the party withholding information.

It is not legally advisable to consider concealing assets and if you suspect your former partner is doing so, there are legal steps you can take to ensure full disclosure.

Contact our divorce solicitors in Northwich, Cheshire

If you’d like to discuss your legal needs with one of our divorce and separation solicitors near you today, give us a call on 01606 48777 or email info@susanhowarthsolicitors.co.uk.