When navigating a separation or divorce, financial disclosure plays a critical role in ensuring fairness and transparency. In Ontario family law, disclosure is more than a formality; it is extremely important for negotiating property division, support, separation agreements, and more. Without complete and accurate disclosure, neither lawyers nor the courts can make informed decisions, leaving both parties vulnerable to disputes and unfair outcomes.
Below, we break down what financial disclosure means, why it matters, and how family lawyers can help you navigate the often complex process. If you have questions about financial disclosure, schedule a consultation with our legal team at Gelman & Associates today.
What is Financial Disclosure in Ontario Family Law?
Financial disclosure is essential to any family law proceeding that involves claims for property and/or support. Without it, no lawyer can properly advise you of your rights or entitlements under Ontario law.
Making a complete and accurate financial disclosure is the very first step in most family law matters. It typically begins with filling out a Form 13 or 13.1 financial statement, which outlines all assets and liabilities in your name.
- Unmarried individuals or those making only support claims must disclose their current assets and liabilities, provide income tax information for the preceding three years, and supply current income details.
- Married individuals who are seeking property claims must disclose their assets and liabilities at three points in time: their date of marriage, their date of separation, and the present day. They must also provide income tax information for the preceding three years and current income details.
In addition, parties must put together a supporting disclosure brief with backup documents to confirm that all the figures they have provided in their financial statement are accurate. Income disclosure and a list of current expenses are also generally required.
While the process of financial disclosure can take a considerable amount of time, it is necessary to make informed, legally-binding decisions about property division, spousal support, and other important family law matters.
Your Legal Obligations and the Impact of Financial Disclosure on Divorce Settlements
Financial disclosure is not an optional process. It is a legal requirement in Ontario family law cases.
- For Agreements Negotiated Outside of Court: Lawyers often attach each party’s financial disclosures to their finalized Agreement. It is important that complete, accurate statements are made, as this will ensure that any Agreements entered into are legally binding and cannot be challenged later.
- For Litigated Agreements: Complete and accurate financial disclosure is required to commence with any proceeding that deals with claims for property and/or support. The court also requires that litigants keep their financial statements up to date by filing updated disclosures before each court appearance. If you do not complete the financial disclosure process, your materials may be rejected by the court, and your case may be delayed.
Accurate disclosure can have a direct impact on settlement outcomes during divorces. During the equalization of property, it may determine who owes whom an equalization payment. In cases of child support and spousal support, it informs both the amount and, in spousal support matters, the duration of payments. As a result, full and honest disclosure gives both parties the confidence that their settlement is fair and legally sound.
What Are the Risks of Incomplete or False Financial Disclosure?
If the financial disclosure process is not properly completed, the outcome of the case is likely to be significantly impacted. Some serious consequences include:
- Incorrect Outcomes: Incomplete or incorrect financial statements may lead to inaccurate support calculations or property division.
- Overturned Agreements: In cases where the parties have entered into an Agreement relying on false financial statements, there will be grounds to argue that the Agreement should be set aside. This is because financial disclosure is a critical component in negotiating settlement terms.
- Delays and Added Costs: Courts can reject incomplete or inaccurate materials, which can prolong your legal matter and increase the amount of legal fees you accumulate over time.
Because disclosure is the foundation of the entire family law process, even small omissions can create significant legal and financial problems down the road. If you have questions about the financial disclosure process, you should contact a family law lawyer as soon as possible.
How to Ensure Full and Accurate Financial Disclosure in Ontario
To ensure that you are making a full and accurate financial disclosure, you must engage in proper planning and diligence. Some key steps include:
- Gathering Financial Records: It may be best to start by visiting all banking institutions that you deal with and requesting your banking portfolio for all accounts that existed at the relevant dates. This portfolio will show all existing accounts on one sheet of paper and may make it easier to ensure that you’re not missing anything important.
- Including all Property and Valuables: Your financial statement will also ask you to disclose your holdings in real estate, vehicles, pensions, and other items of value.
- Disclosing International Assets: Complete financial disclosure does not only refer to your assets and liabilities in Canada. If you have property, bank accounts, or other items of worth outside of the country, you have an obligation to disclose their value.
Leaving out assets, whether intentional or not, can compromise your family law case and any Agreements you reach. It is important that you don’t leave anything out. By taking the steps outlined above, you can help ensure that the disclosure process is complete, accurate, and less likely to be challenged at a later date.
Contact Gelman & Associates Today For Assistance With The Financial Disclosure Process
Filling in your financial statement accurately is more than just an exercise in paperwork–it is a safeguard for your future. If the disclosure process is not properly executed, you run the risk of your Agreement being set aside or making decisions based on incomplete information.
At Gelman & Associates, our family lawyers spend time working with clients to confirm that the disclosure process is completed thoroughly and carefully. From identifying what needs to be disclosed to reviewing supporting documentation, we help ensure that your statement is accurate, complete, and legally sound. With our support, you can make decisions with confidence and enter into Agreements that are binding.
If you are facing separation or divorce, contact Gelman & Associates today to schedule a confidential consultation and find out how we can assist with the financial disclosure process. We serve clients across Ontario.
