What is Financial Disclosure in Divorce?

One of the most important steps in getting divorced is sorting out the financial arrangements. This can often be complex and it is essential to know what your rights and responsibilities are. To ensure there is a fair outcome, full financial disclosure from both you and your ex-spouse is needed. In this article we explain more about what financial disclosure involves and what you should do to prepare for it. We also explain what you should do if think your ex is not being honest about their finances.

Financial disclosure involves both spouses sharing full details of their financial circumstances. They should include details of assets, liabilities, income, pensions, and outgoings. The disclosure needs to be full and accurate. By doing this it allows both of you, and the court if necessary, to understand the full financial picture before a financial settlement is agreed.

Normally this process is done voluntarily by the divorcing couple and their solicitors. It can also be done as part of court proceedings. Even if your divorce is amicable, full financial disclosure is required to ensure that the agreement is fair and legally binding.

It is important to be prepared to help ensure the process runs smoothly. The best way to start is by pulling together recent and relevant financial documents and organising them clearly. It should include things like savings, investments, properties, pensions, income and debts. The information provided should be accurate and up to date. It is a good idea to start doing this as soon as possible and then you can take your time to ensure you have all the correct information.

Typical documents that are needed will include bank statements (usually for the past 12 months), payslips and P60s or tax returns if self-employed, mortgage statements, credit card and loan statements, property valuations, details of pensions, investments and savings account statements, and proof of any benefits received. If applicable, you will also need to provide business accounts.

A Form E is the document used during divorce proceedings to provide financial disclosure. It is a detailed form that includes sections on your income; capital – including property and assets; pensions; liabilities; expenditure; and future financial needs. Both parties complete their own Form E.

Once financial disclosure has been exchanged (usually in the form of Form E), each solicitor will then review the other party’s documents. At this point any questions and concerns can be raised. In some cases, further documents may be requested to support the figures provided.

If there is disagreement, the matter may be referred to a Financial Dispute Resolution (FDR) hearing. The court will encourage the parties to reach a fair settlement. If that is not possible, a final hearing may be necessary for the court to decide the outcome.

It is a legal requirement to provide a full and honest financial disclosure. Even if you and your ex-partner are in agreement over a settlement, failing to provide full and accurate information may result in the court refusing to approve it. If either you or your ex-partner withhold information or undervalues assets, the court has the power to set aside the agreement or order penalties.

If you think your ex-partner has been dishonest in their disclosure you should raise this with your solicitor immediately. The court treats false disclosure very seriously and has the power to order further disclosure or evidence, reopen previous financial orders if new information comes to light, and impose cost penalties or sanctions. In some cases, your solicitor may instruct a forensic accountant or valuation expert to look in detail at your ex-partners financial disclosure.

Any suspicions about hidden assets should be investigated thoroughly. This could include undeclared income or transferring assets to family members. Your solicitor can apply to the court to compel disclosure or request third-party evidence.

In serious cases, the court can issue search orders, freeze assets, or draw adverse inferences against the party suspected of dishonesty. Hiding assets can result in significant legal consequences, including criminal charges.

If your ex-partner refuses to provide financial disclosure voluntarily, you can apply to the court for a financial order. The court will then set a timetable and deadlines for disclosure, and can order penalties for non-compliance, including: orders to compel disclosure; fines or cost orders; inferences drawn in your favour.

It’s always best to try to resolve matters amicably, but if that’s not possible, court proceedings can ensure the process continues fairly and transparently.

Our experienced family law solicitors in Milton Keynes can guide you through every step of the disclosure process, protect your financial interests, and help you work towards a fair and lasting settlement.

In addition to our head office in Milton Keynes, we also have offices in Bicester, Watford, and London where we can arrange appointments to see you in person. Talk to us in confidence and find out where you stand. Get in touch – we’re here to help.

This article is intended for the use of our clients and other interested parties. The information contained in it reflects the author’s view and is believed to be correct at the date of publication. However, it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional legal advice.