Financial Disclosure is a phrase I use at least daily, sometime more than 5 or 10 times a day. It’s part of my everyday language and sometimes those of us in the family law world forget that those two words may not have an obvious meaning to anyone else.
Quite simply, financial disclosure is the documents you provide about your financial position.
In family law, we have a format as to how the financial disclosure is usually provided. Whether you are negotiating directly with your ex, through solicitors, using mediation or the collaborative process or going through court proceedings or arbitration we tend to use a Form E: Financial Statement to provide the financial disclosure. You can view the Form E here.
The Form E sets out the standard documents which should be produced by each member of a couple who are divorcing. It can seem quite a daunting document as it runs to 28 pages. Not all sections of the Form E will be relevant to you though and so you only complete the sections of the form which apply to your situation. The Form E provides a detailed summary of your financial position and the supporting documents you should put with it are evidence of the information you put in the form. The usual documents to include are :
- Valuation of any properties
- Mortgage Statement
- The last 12 months of bank statements for all accounts held
- Dividend counterfoil or statement of shares, PEPs, Tessas, ISAs
- Surrender values of insurance policies
- Business accounts for the past two years
- Cash Equivalent Value of pensions
- Last 3 payslips, P11D and P60
- Tax Assessment for any self-employed income
The Form E and the supporting papers form the main part of the financial disclosure process. However, each party can then raise questions about the information provided by the other. The questions must be fair and relevant to the issues involved in the separation. The couple may also need to jointly instruct an expert to prepare a report to complete the financial disclosure. Such experts could include a valuer for the family home, a valuer for the business, an actuary to report on the pensions.
Gathering together the papers needed for financial disclosure can sometimes feel onerous but it is important as without the full financial position negotiations cannot properly take place. Just because an asset is disclosed as part of this process does not mean that it will have to be shared. Once the financial information is provided the negotiations take place and reasons why assets should be treated in a particular way put forward. Examples can be that a share portfolio or savings account came from an inheritance, a pension was accrued prior to the marriage. Financial disclosure is also a good housekeeping exercise as you will need to review your financial position as a result of a separation.
Financial disclosure is the foundation for any process used to deal with the division of the assets following the breakdown of a marriage.
Our Family Law experts guide you sensitively through the process of financial disclosure during a separation, please get in touch to discuss your own situation.