In divorce, financial disclosure is a complex topic that can be a major sticking point when you are looking to reach a financial settlement. Generally speaking, the higher the net worth involved, the more time-consuming the process can be. When significant wealth is a factor, it’s common to touch upon potentially intricate financial arrangements such as trusts, shares, business interests, and overseas properties.
In a recent blog, we asked the question, ‘Can You Divorce Without Financial Disclosure?’ This time around we’ll be addressing a range of other FAQs we frequently hear regarding this often contentious subject.
Here we’ll cover everything from completing Form E, to whether you need to declare your new partner’s finances during divorce proceedings. The more you know about the common themes surrounding financial disclosure after separation, the easier it should be to understand your available options.
Can You Separate Without Financial Disclosure in Divorce?
In divorce, financial disclosure is a legal obligation once an application to the court has been issued. In fact, even when court proceedings have not been issued, it’s vital that both parties disclose their finances. This will allow each solicitor to offer detailed advice to their respective clients.
Refusing financial disclosure in divorce is often viewed harshly by the courts. It could lead to significant delays, additional stress, and in certain cases, even more severe consequences. If you’re going through a complex separation, seeking advice from a high net worth divorce lawyer can make the process much simpler.
Can I Refuse to Complete Form E?
If two parties cannot reach an agreement, and a court application is issued, they will need to complete Form E separately. The information contained will help the courts and the parties’ legal teams decide how best to split finances fairly. Refusing to produce financial disclosure in divorce could in extreme circumstances result in a fine or, in some cases, a prison term.
How Can I Prove My Ex is Hiding Money?
If you suspect that your ex is hiding assets, you should contact a family lawyer. If they are in an uncharacteristic rush to reach a settlement, or are trying to avoid divorce financial disclosure altogether, your concerns may be justified. An established high net worth solicitor may use a freezing injunction if there is evidence to show that your ex is going to dispose of a matrimonial asset that they shouldn’t.
To read more about the potential penalties for hiding assets, please see our blog.
Can Solicitors Check Bank Accounts in Divorce?
A fundamental feature of divorce financial disclosure is that both parties provide a full year of bank statements for every account they hold. This information will be used to analyse expenditure, transfers, payments, etc. If there is anything suspicious in the statements, forensic accountants may be used, or additional statements may be requested, to complete the financial picture.
How Far Back Does Divorce Financial Disclosure Go?
Financial disclosure in divorce usually spans the previous 12 months. It’s possible for one party to request that bank statements go further back than this, but there must be sound reasoning behind the request. If the courts don’t view the request as justifiable, it will more than likely be declined.
Are Debts Included in Divorce Financial Disclosure?
During financial disclosure in divorce, not only are debts included, but they can be just as contentious as the division of assets. Like assets, much will depend on whether debts are classed as either matrimonial or a spouse’s sole responsibility. It’s important to note that debts can still be classed as being shared, even when they’re not jointly-signed.
Although the courts won’t be able to change names on individual debts, they will be able to ensure that assets are divided to offset against what is owed.
What Documents are Needed For Financial Disclosure in Divorce?
Divorce financial disclosure requires you to provide evidence of all income, assets and liabilities on Form E. Although the form has its own checklist, you may need additional documents, which your solicitor will be happy to discuss. The basic documents you should include are as follows:
- 12 months of bank statements
- A recent mortgage statement
- Payslips/P60
- Pension documentation
Financial disclosure in divorce also requires you to confirm your typical living expenses, such as mortgage/rent payments, the cost of utility bills, food, clothing etc.
What are the Risks of Non-Financial Disclosure in Divorce?
Divorce financial disclosure is a mandatory feature of the financial aspect of separation. Without it, you are relying on the integrity of your spouse to be completely open about the full scope of their potentially valuable assets. In short, there would be no guarantees that you’re getting your deserved share.
And, while a settlement can be reopened if non-disclosure come to light at a later date, this is likely to add additional stress, time, and expense to a process that you assumed had been resolved.
What is Covered By Divorce Financial Disclosure?
Financial disclosure in divorce covers all assets, income, debts, and projected earnings. This can often include properties, pensions, credit card debts and loans. All of this will need to be backed up by documents that can be used as evidence of everything you’re including in Form E.
Is Mediation Accepted by the Courts For Divorce Financial Disclosure?
Mediation can be an invaluable tool in helping couples to separate more amicably. Your mediator may encourage both parties to bring financial documents to future meetings. The forms you both complete will be included in an ‘Open Financial Statement’, which will be recognised by the courts as satisfying financial disclosure in divorce.
How Much Do Solicitors Charge For Form E?
Although it’s not compulsory to seek legal advice when completing Form E, it is highly recommended. Financial disclosure after separation is one of the most important steps in reaching a financial settlement, and professional guidance is often invaluable. The actual charge will vary according to the complexity of the assets you hold.
Do I Have to Disclose My New Partner’s Assets?
A new partner could have a big impact on your financial settlement if you are living together in a settled relationship. To ensure full financial disclosure in divorce, you should declare the relationship, even if they don’t have any assets. Failure to do this could lead the court to draw adverse inferences about your honesty and, if discovered later, could result in a court order being reopened.
How Many Divorces Go to a Final Hearing in England and Wales?
When a financial settlement is required, a divorce can go through three steps. They are: the first directions appointment (FDA), the financial dispute resolution (FDR) and the final hearing. This final hearing can last anywhere between a day and a number of weeks depending on the complexity of your case. Recent studies suggest that around 14% of divorces go all the way to a final hearing.
What Happens After Financial Disclosure in Divorce?
Following divorce financial disclosure, the finances will be reviewed and any questions will be sent to your ex. The questionnaire may cover missing information, requests for further evidence and supporting information, and additional queries about certain assets. Once satisfied, and once any assets being disputed have been valued, your solicitor will then progress to talking about settlement offers.
What Happens if You Can’t Agree a Divorce Settlement?
If a settlement cannot be agreed, an application will need to be made to the courts. Both parties will need to commit to divorce financial disclosure by exchanging statements of finances. This is followed by the FDA and, once all documents have been submitted, the FDR. A final hearing will be required if a settlement still cannot be agreed.
The final hearing will allow the judge to hear both sides, before they make a binding final order.
Do You Need to Go to Court for a Financial Settlement?
The majority of divorce cases can be agreed without the worry and expense of the courts. Seeking a solicitor who can guide the process should make collaboration the priority, which can reduce legal fees. If a settlement can be agreed amicably, the courts will check that it is fair and reasonable before using it to form a binding order.
To read more about this subject, please see our recent blog.
Does My Ex See My Financial Disclosure?
Whether you want to agree to an amicable settlement out of court, or the assistance of the court is needed, financial disclosure after separation is essential. Both parties will need to be completely transparent about their finances for a fair outcome to be reached. Being transparent offers an opportunity to question any information provided and reach a lasting agreement.
How Does a Judge Decide a Financial Settlement?
In England and Wales, judges can use their discretion to decide the division of assets and financial arrangements. They will think about the needs of both parties, the welfare of children, financial contributions, assets, income, and potential earning capacity. The overarching goal is to achieve fairness and meet the financial needs of both spouses and dependents.
How Do You Avoid Financial Disclosure in Divorce?
Financial disclosure can only be avoided if both parties agree that it isn’t required. This may mean that they have decided on how to divide assets among themselves, and the agreement has been made in good faith.
It’s important to note that there isn’t a hard and fast rule that is applied to all divorces, as each relationship is assessed on a case-by-case basis.
Lowry Legal Can Simplify Divorce Financial Disclosure
Lowry Legal is a boutique law firm that specialises in highly complex cases involving significant wealth. We know how important transparency can be in making agreements over the likes of finances and child arrangements, so always work towards collaboration. Our experience of high profile cases means that we’ll adopt the more constructive approach wherever possible, as this is often the quickest route to a favourable outcome.
We also know that no two relationships are ever the same, so we specialise in fine tuning the right approach for your circumstances. Along the way, we’ll speak to you in simple and clear language, to ensure that you fully understand both the immediate challenges and the best routes forward. Although we offer in-house solutions, we can also rely upon expert assistance from the likes of tax professionals and forensic accountants.
To speak to one of our specialist family lawyers, contact us today, or email enquiries@lowrylegal.co.uk.
