One of the first tasks when trying to reach a financial settlement during the divorce process is to enter into financial disclosure. Each of the divorcing couple will have to provide information about their financial position to their spouse for the purposes of negotiation.
This is usually done voluntarily but follows the same rules as if the divorcing couple were using the court process to secure a financial settlement. If it is not possible to reach an agreement, and you end up going to court to obtain a financial order, both spouses will be ordered to complete a financial statement as part of the financial order court process.
Our specialist divorce and finance solicitors can guide you through the process and clarify what information is needed in your specific set of circumstances.
What is financial disclosure?
Financial Disclosure is the process whereby a divorcing couple states the details of their income and liabilities in a financial statement in order to come to an agreement on the division of assets.
What is included in financial disclosure?
It will depend on the individual divorcing couple’s circumstances but, as an idea, the following information will need to be provided:
Valuations of property, land and buildings
Bank, building society or National Savings accounts
Investments (including shares, PEPs, ISAs, TESSAs, National Savings Investments, bonds, stocks, unit trusts, investment trusts, gilts and other quoted securities)
Life insurance policies, including endowment policies
Money owed to you
Cash sums
Personal belongings worth more than £500, for example; cars, collections, pictures and jewellery, furniture and house contents
Liabilities (including money owed on credit cards and store cards, bank loans, hire purchase agreements)
Capital Gains Tax estimates
Business Assets and Directorships
Pensions and Pension Protection Fund (PPF) Compensation
Earned income from employment
Income from self-employment or partnership
Income from investments e.g. dividends, interest or rental income
Income from state benefits (including state pension and child benefit)
What information do I need to provide as part of financial disclosure?
As well as informing as to the assets and liabilities of the divorcing couple, financial disclosure also looks to the future and the needs of each spouse and any children. You will be asked to provide information about:
Income needs for yourself e.g. housing, transport costs, holidays, household bills etc;
Income needs for any children living with you;
Capital needs e.g. house, car;
Capital needs for any children living with you.
What is a Form E?
Form E is the document that is completed and signed by both parties in a divorce during financial disclosure that states their financial position in relation to income, assets and liabilities.
Why do I have to enter into financial disclosure?
For a divorcing couple to be able to negotiate successfully, there needs to be a clear and complete picture of the financial situation of the two spouses.
You may hear our specialist divorce solicitors talking about “full and frank” disclosure. If one party does not know all the information, their ability to negotiate to reach an agreement that is fair to both parties, and any children of the marriage, is hampered.
If a court becomes aware that one party has not been honest about their financial situation, then any financial order made can be set aside.
Can I refuse financial disclosure?
If you refuse to enter into financial disclosure during the court process despite being ordered to do so, you will be in breach of a court order.
The judge has the ability to attach a penal notice to an order and, if you continue to fail to comply with the court order, they can ultimately hold you in contempt of court.
What if I have questions about my spouse’s financial disclosure or believe something is missing?
Once each spouse receives the other’s financial disclosure, they have the ability to go through it carefully with their solicitor. At AFG Law, our experienced divorce solicitors will highlight anything they think is unusual, missing or requires further explanation.
Queries about financial disclosure are raised by preparing a questionnaire. The Statement on the Efficient Conduct of Financial Remedy Hearings in the Financial Remedies Court issued in January 2022 states that any questionnaire prepared must be limited to 4 pages, this means it is really important to consider your questions carefully.
Our trained financial settlement solicitors can provide you with advice to hone your areas of concern and prepare focused questions.
I don’t think my spouse is telling the truth about their financial disclosure. What can I do?
You should discuss these concerns with our specialist divorce solicitors, but it is very important that you do not take matters into your own hands by opening their post or looking through their documents.
The courts have wide powers to allow further investigation of a disputed asset or income stream. This can include placing penal notices on court orders and directing third party witnesses such as representatives of a bank, family members/friends or employers to attend court.
‘Self-help’ by trying to find out about the asset or income from your spouses’ personal documents, whether paper or online, will not be permitted by the court. This is a very complex area of law; unlawfully obtained materials must be returned and our solicitors are under a duty to return them without looking at the content and the documents would generally not be admissible in a court hearing.
Award-winning legal services
We offer a full range of legal services for individuals and businesses alike.
Many of our services are provided UK-wide, with our physical offices located in Bolton and Bury.
Our systems are hosted externally by an IT firm called CTS, they host systems for over 200 law firms throughout the UK. We understand that in the early hours of Wednesday morning they suffered a cyber-attack and as a result the law firms hosted by them have been unable to access their systems. Unfortunately we are included in this.
We have been reassured by them, by the actions that have been taken and the specialists that they have engaged with, that there has been no breach of individual firms data - it appears to be just their hosting platform.
They are currently working to restore their clients access and in turn our connectivity. As a result of this, we are experiencing a disruption to the usual level of service we can provide. Rest assured we are doing everything we can to minimise disruption to you.
