Step One, Exchange Financial Disclosure
The first major step in any separation is to produce and exchange financial disclosure. As mediators, we are unable to provide accurate assistance with respect to division of property without knowing certain information about each party. A standard notice to disclose requires parties to exchange income tax information, pay stubs, 6 months worth of credit card and bank account information as well as investment accounts, pensions and any other significant assets or liabilities held jointly or separately.
Income information is very important as this helps lawyers determine what should be paid in spousal and child support. It is very important to be straight forward with your counsel about all lines of income you may have including dividends. If your partner and their counsel suspect that you are hiding income this can have very negative consequences in the eyes of the Court. If the Court is not satisfied with the income documentation you have provided, they are able to impute your income to reflect a more accurate income based on the facts of your matter.
What If A Party Quits Their Job to Evade Child Support?
The Courts take deliberate underemployment very seriously. Generally, lawyers, look at three years worth of income tax information to get a clear picture of each party’s income and to gather a snapshot of their standard of living. If the Courts find that a party is intentionally under-employing themselves for the purpose of reducing or evading their support obligations, they may input their income to the reasonable amount. This is generally about that they would be making had they not intentionally reduced their hours or wages. It is important to note that the Courts will not impute income on suspicion alone, there must be evidence in support of same.
Tips for Exchanging Financial Disclosure
Upon retaining a lawyer one of the first things you will be asked to do is to produce your financial documents. It is important to clearly read and understand what your lawyer is requesting. Disclosure items are provided pursuant to a Notice to Disclose Application as this is the information each party is entitled to receive. The easiest way to keep your legal fees low in this stage is to produce the required documents in a reasonable amount of time (usually about 1-month). If you refuse to provide documents or hide assets / liabilities there can be serious legal and financial consequences.
If you have questions about exchanging financial disclosure or your partners income, connect with us.