In previous articles in this series, I have outlined the first phase of a divorce (which is formally separating) and the second (which is getting initial legal advice). In this third phase, I discuss the legal obligations imposed on you and your spouse to each provide Financial Disclosure to the other.
What is Financial Disclosure?
Financial Disclosure is mutual legal obligation on the part of both you and your (soon-to-be) Ex-spouse to provide thorough and timely ongoing disclosure of all financial information that is relevant to the untangling of your joint affairs, and to your prospective economic obligations towards each other.
This duty is prescribed by law; if your Ex requests you to provide Financial Disclosure, you are obligated to provide it. Moreover, the mutual obligation is ongoing: if in the course of the divorce process anything changes for either of you from a financial perspective, then you are obliged to let each other know.
Why is it Necessary?
Simply put, Financial Disclosure allows for both of you to be fully informed of each other’s financial circumstances. This information shapes the various specific legal obligations you and your Ex may have towards each other and your children (such as spousal and child support); it will also be instrumental in the calculation of your respective Net Family Property amounts – and the subsequent equalization of those amounts. In addition, it will form the basis of the overall legal advice that your lawyer will give you, in terms of your rights and obligations in the divorce process and beyond.
It is therefore important that the financial figures you and your Ex provide are both accurate and comprehensive. Not only will you provide them to your own lawyer, but they will also be shared with your Ex’s lawyer and will form the mathematical basis of the Net Family Property calculation and additional discussions or calculations on child support and spousal support, as required.
How is the Disclosure Obligation Fulfilled?
Instrumental in the Financial Disclosure process is the task of you and your Ex each (separately) filling out a “Financial Statement,” which is prescribed form available on the Ontario Courts’ website (http://www.ontariocourtforms.on.ca/english/family). The Financial Statement requires you to provide a comprehensive and accurate listing of both your assets and your liabilities on two different dates: 1) the date of your marriage; and 2) the date of your separation. Along with a list of the appropriate financial figures, you must also provide copies of any supporting documentation.
Depending on the circumstances, assembling the information needed for the Financial Statement may not be complicated: it might involve little more than simply compiling your income tax returns along with your employment income records. However, if you and your Ex are involved in family or other businesses, or if one or both of you have extensive investments or debts, then you may need to hire an accountant or valuator to assist.
Next article: Initial Negotiations.
Shulman Law Firm is a Toronto-area firm of experienced Family Lawyers who can provide practical advice and effective representation relating to the steps and processes involved in separating and getting divorced in Ontario. Contact us to set up a consultation.