Financial disclosure is a term that is most commonly used in relation to resolving financial matters on divorce. It is a term that is used to describe the providing of financial information to the other party. When a marriage breaks down and the two spouses seek to resolve the finances, the first step is for both parties to provide full and frank financial disclosure to the other. This means that both parties must fully disclose all income, assets and debts that they have to the other party.
Such disclosure is usually accompanied by supporting documents evidencing their financial position. Whilst parties can agree the extent to which financial disclosure must be evidenced, it is common to follow the requirements set out in the Form E, which is the document that both parties would be required to complete if Court proceedings were issued. The Form E summarises towards the back of the form what evidence is expected to be provided in support. This includes, amongst other things, copies of:
The need for both parties to provide financial disclosure to the other applies whether the spouses are seeking to agree matters directly, via mediation, through solicitors or in court proceedings. The reason for this is that neither party is in a position to agree a fair settlement until they know exactly what the other’s financial position is. Similarly a solicitor will be unable to properly advise either party in relation to a proposed settlement until both parties’ financial positions are known.
When seeking to resolve financial matters on divorce, the duty to provide financial disclosure is ongoing. This means that any significant change in either party’s financial position prior to a financial settlement being concluded, must be notified to the other party. If one party does not fully disclose all their income, assets and debts then this can form a basis by which the financial order could subsequently be set aside.
Given the importance of financial disclosure and the discretionary nature of the law in relation to financial matters on divorce, we would always urge parties to seek early advice from a family solicitor.
If you would like advice please get in touch.
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