If you are going through a divorce, you will need to make a legally binding agreement in respect of your finances. Before doing this, you and your spouse will need to fully disclose your financial situation to each other.
If the court is asked to make a financial order on divorce, it will aim to divide assets fairly. To be able to do this, it will need both parties’ finances to be disclosed. While it may be frustrating to have to reveal everything, particularly when you do not believe that your spouse is entitled to certain assets, it is essential to include everything otherwise the court may overturn its order at a later date if it is discovered that either party has not been entirely open.
What is full financial disclosure and what does it cover?
Full financial disclosure is the disclosure of all individual assets and liabilities. This includes the following:
- The amount of income received, from all sources
- Expected future expenditure
- Assets and liabilities
- Documentary evidence backing up the figures disclosed
How does financial disclosure work and what is Form E?
If you are not able to agree a financial settlement with your spouse and you need to ask the court to make a financial order, you will need to complete Form E. This is a detailed financial statement form on which you will need to include all of your income, assets and liabilities. You will also need to provide some other details of your situation, to include whether you have children, some information about your marriage and how you wish the assets to be shared.
If you are attempting to agree to a financial settlement without a court hearing, then it is often still recommended that both parties use Form E to disclose information as the form is comprehensive and, should you end up in court anyway, the form will be needed then.
What documents are included when you make a full financial disclosure?
You will need to provide evidence of all of the income, assets and liabilities you have. This could include mortgage statements, payslips, most recent P60, bank statements for the past year, pension valuations and statements for all investment holdings and savings.
For more information, see our article pensions in divorce.
Can I refuse to make full financial disclosure?
It is not recommended that you refuse to make a full financial disclosure. This is likely to delay the divorce process and the court is likely to object to your refusal.
What happens if I don’t disclose all my assets in divorce?
If you fail to disclose all of your assets in a divorce, the court has the following options open to it:
- To draw adverse inferences from the non-disclosure;
- To find the relevant party in contempt of court and administer penalties accordingly, such as a fine;
- To make a finding of fraud and penalise the person concerned on this basis, again, with the risk of a fine;
- To order the non-disclosing party to pay the other party’s costs;
- To set aside an order that has been made on the basis of non-disclosure.
In extreme cases, the court could even order a prison sentence.
Will I see my ex-partner’s Form E in divorce?
Your form E and your ex-partner’s will be disclosed to each other, so you will both be able to see what the other is disclosing.
What can I do if my ex-partner has not made full financial disclosure?
If you believe that your ex-partner has failed to fully disclose all of their assets, you can ask the court to order disclosure. It also has the power to attach a penal notice.
Do I have to make full financial disclosure if I do not go to court?
Financial agreement is often reached by negotiation, avoiding the need for courting hearings. However, it is still necessary to make full financial disclosure. A solicitor will not recommend entering into an agreement until full disclosure has been made.
If you go to mediation, the mediator will also expect full disclosure and may decide that mediation is not appropriate if it is not forthcoming.
Once you reach a financial agreement, it should be sealed by the court to make it into a binding order which will protect you from further claims in the future and make the terms of the agreement legally enforceable. The judge will need to see a statement of information in respect of your finances before making a financial consent order.
Contact us
If you are going through a divorce or separation, we can advise you in respect of your financial situation to ensure that your rights and interests are protected. We can help you deal with disclosure, which can seem daunting, and answer any questions you may have.
If you would like to discuss financial disclosure or any other aspect of divorce or separation with an expert family lawyer, email us at info@witansolicitors.co.uk or fill in our contact form. We have offices in London, Birmingham and Northampton.
