The importance of disclosure in a divorce

You might be surprised to know that most of the delays in resolving issues of property divisions, child support or spousal support are caused by the attempt to collect proper financial disclosure in a divorce between spouses.

What is Financial Disclosure?

Financial disclosure is the term that means a party’s financial information required to determine their financial situation accurately. This refers both to income and amount of property and debt owned by the party.

A “Notice to Disclose” is a court document commonly exchanged during the divorce or separation process for demanding the initial financial disclosure. If your divorce matter is proceeding in the Provincial Court, the court document is called a “Request for Financial Disclosure”.

To accurately determine income, your family lawyer will require the following supporting documents, which include:

• The last 3 years of income tax returns and Notices of Assessment. The previous 3 years are required to determine a pattern of income.
• The 3 most recent paystubs to determine income in the current year for people that earn income as employees
• A statement or letter showing any additional sources of income if you receive income from employment insurance, social assistance, a pension, workers’ compensation, disability payments, dividends or any other source. This includes any ongoing payments and the total amount received.
• if you are a student, a statement indicating the total amount of student loans, grants, bursaries, scholarships and living allowances you have received.
• if you operate your own business (incorporated, unincorporated or as a partnership), detailed financial information showing the revenue, expenses, and profit. Generally, a family lawyer will require financial statements prepared by an accountant.  As well, a statement is necessary for explaining why expenses were required for operating the business, or whether expenses had a personal benefit for you or someone close to you.

In situations where child support is an issue, a list of all special or extraordinary expenses for the children (for things such as daycare, extracurricular activities or medical expenses) are required, including receipts.

Where spousal support is at issue, a monthly budget is required.

When determining the division of property, the following are required:

• Bank statements for all bank accounts for the past six months
• Credit card statements for all accounts for the past six months
• Statements for any investments, RRSP’s, or pensions
• A list of all income sources, assets and liabilities. This information goes into a form that outlines the values of the asset or debt and when the asset or debt was required. This form has to be sworn in front of a Commissioner for Oaths
• A list of any property that would be exempt from distribution

This is just the financial disclosure required at the start or the process. As matters go on, we may request older tax returns, previous years’ bank statements or further information regarding a business. There are different methods to obtain this information if not provided, such as:

• Written Interrogatories
• Questioning or,
• Court application

We understand that it can be challenging to determine what information to provide and what information to request. If you are dealing with an uncooperative spouse/party, the process of collecting full and complete financial disclosure can be complicated.

A family lawyer with Capital City Law can provide legal advice with these difficult processes. Call our office today at (780) 462-4321 or online through our Contact Us page.