If you are in the process of separating and settling financial matters, it is vital that you understand the importance of providing and receiving financial disclosure to and from your former spouse.
What is financial disclosure?
In family lawfinancial proceedings, Rule 6.06 of the Family Law Rules imputes each party with a duty of full and frank disclosure. This means that you must provide to your former spouse all information financial relevant to the dispute, and vice versa. You and your former spouse will be required to provide to each other copies of all financial documents that relate to your property settlement. A document will be relevant if it discloses information on your assets, liabilities and superannuation entitlements.
Examples of financial disclosure
Below is a general list of disclosure documents that you may be required to disclose:
- Evidence of income (3 most recent payslips);
- All bank statements (held jointly and solely) for the last 12 months prior to separation to the current date;
- The most recent 3 tax returns;
- Documents that verify any interest in a company or a trust;
- The most current superannuation fund statement;
- Valuations of property, vehicles and other assets;
- Any loans from a bank or any other lender;Any financial agreements between yourself and your former spouse;
- Documents that provide evidence of any gift, inheritance or asset that is expected to be transferred in the future;
- Documents that provide evidence of any assets sold or disposed of within 12 months prior to separation; and
- Any other financial documents that shed light on the financial position of each party.
Please note that this list is not exhaustive and you may be required to disclose further documents. The nature and complexity of the property pool will inform whether any additional documents are required to be disclosed.The aim of this process is to gather as much information from each party as possible to verify the extent of the asset pool and contributions made by both parties. This information will help guide the property pool division.
Failure to provide full and frank financial disclosure
Should either yourself or your former spouse fail to provide sufficient financial disclosure, the Court has wide discretion with regard to consequences. The Court may simply order the non-disclosing party to provide further financial disclosure. The Court may even require the non-disclosing party to pay the other party’s legal costs. Alternatively, the Court may find the non-disclosing party guilty of contempt of Court and issue a serious penalty or fine. Another approach the Court may take is to dismiss the non-disclosing party’s application.
Ultimately, a failure to provide sufficient financial disclosure demonstrates a lack of respect to the Court and may negatively impact any family law related matter. None of these outcomes are favourable to any party involved, therefore it is always the best option to disclose as much financial material as possible to avoid an adverse outcome. We advise that you provide as much disclosure as possible from the outset and your solicitors should be able to discern which documents are relevant or not.
What if my former spouse is not disclosing all financial material?
If you believe that your former partner is withholding financial documents, and your matter is before the Court, there are processes via the Court rules that your family lawyer can pursue on your behalf. For instance, you may wish to:
- File an Application (supported by an affidavit) to seek an order for the other party to produce the documents;
- File a subpoena to obtain copies of the documents; or
- Send a notice to the other party to produce the documents.
Conclusion
Both yourself and your former spouse should come to the property settlement with a ‘cards facing up’ approach. This mindset can help facilitate an amicable and straightforward resolution. As discussed above, selectively withholding financial information is a very poor decision that can negatively impact your interests in the property settlement. Should you have any questions or need clarification on this process, be sure to contact one of our solicitors at James Noble Law to better understand your rights and responsibilities.
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