If you are going through a separation or divorce, you have most likely have been through, or are about to go through the process of exchanging financial disclosure. This is one of the first steps of the divorce proceedings. Exchanging financial disclosure provides all parties with equal knowledge of each others’ assets, income and debts. It’s in your best interest to be forthcoming and honest during this process as there are negative consequences to withholding financial information.
How to Exchange Financial Disclosure
The process of exchanging disclosure is a necessary part of family law proceedings. Parties and their counsel need to know the details of the assets involved in order to divide them during divorce. Exchanging disclosure is typically done on a voluntary basis by filing a Notice to Disclose. However, if a party does not provide the requested disclosure an Order can be made against them. By voluntarily providing all the relevant financial material in a timely manner you will save both time and money.
An Example of False Disclosure
The Courts don’t look kindly on spouses who are dishonest in their financial disclosure. In an Ontario case in 2016, a wife was awarded 100% interest in property after the husband made a false claim about his annual income. The husband and wife had signed a separation agreement in 1999. The couple divorced in 2004. Following the divorce, they updated the separation agreement in 2005 to reflect the sale of the matrimonial home and the purchase of a new home. The title of the new home was in the ex-wife’s name only, with the husband owning a 50% interest in the house. The wife and children resided in the new home.
Court Ruling on Dishonest Disclosure
Five years following the divorce, the wife brought a court action against the husband when she found out that he had lied about his income during the financial disclosure process. He had withheld $264,000 of his annual income from her when they updated the separation agreement in 2005. The Court found the husbands actions to be “unconscionable”. According to the Family Law Act in Ontario, “if a party [fails] to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was the made”, the courts can quash the separation agreement. This is exactly what happened as the trial court ordered that the agreement be invalid and ordered that the wife get 100% interest in the house.
If you are going through a separation and need legal advice, connect with us to set up an initial consultation. Our team of Calgary divorce lawyers are skilled in family legal matters pertaining to financial disclosure.