Financial Disclosure – Explained
Each party must be fully informed of the financial circumstances of the other. The Ontario Family Law Act expressly sets out that a Court can set aside any contract or settlement if it was reached without full disclosure by one or both parties.
Moreover, if one spouse conceals information or assets, or otherwise fails to make such full disclosure, then the other spouse can apply to a Court to compel him or her to do so. Naturally, neither of these outcomes is conducive towards encouraging fair and amicable settlement between the parties.
Given this requirement, questions always arise as to what documents each spouse is obligated to provide, and – by extension – what documents and information the parties can be compelled to disclose.
For example, in a typical divorce proceeding involving the issues of support and property, each spouse would normally provide the following documents:
- copies of any employment contracts
- income tax returns for the past three years, including all attachments and schedules, and any notices of assessment or reassessment
- for employed spouses, his or her most recent pay stub
- for self-employed spouses, the last 3 years of his or her financial statements
- bank statements for all bank accounts, brokerage accounts, RRSPs, and other investments as of the month of separation
- pension plan documentation
- life insurance documentation
- copies of all Canada Savings Bonds owned on the date of separation
- trust documents and trust financial statements
- title documents for any property owned by a spouse
- documents to support the origin of any gifts, inheritances or personal injury awards
- a list of any household items which have more significant monetary value
Debts and liabilities:
- statements for all credit cards and lines of credit for the month of separation
- mortgage statements for the month of separation
Looking at this list, it is clear that the financial disclosure obligation can be a significant one. Moreover, this is a general list – a lawyer can advise on whether additional documents may be needed in any particular circumstance.
It is important to remember that the financial disclosure requirement is a mutual one: each spouse is under the same legal compulsion to provide copies of all financial and other documents that are relevant to sorting out any matrimonial and support issues. And this mutual disclosure should be made in a timely manner, because the quicker that information is exchanged, the more quickly the parties can come to a resolution of the financial issues and move on with their lives.
Naturally, the precise nature and scope of what must be disclosed will vary according to the situation. We would be happy to meet with you to review all of your circumstances, and provide you with the specialized legal advice that is relevant to your matter.