Do I have to do financial disclosure?
18 September 2023
Unsure of what financial disclosure is and if it is necessary? Solicitor Lucy Attfield sets out what you need to know, to help you enter into financial disclosure with confidence.
What is financial disclosure?
If you are going through a separation and looking at how to divide your finances, you may have heard the term ‘financial disclosure’.
Financial disclosure is a way to be fully transparent with your former partner about your financial position. This transparency will allow you both to understand what finances are available. The information provided will also be used to help you reach a settlement.
It is most common to go through financial disclosure as part of a divorce; however, this can also be done in cases of judicial separation, dissolution of a civil partnership, annulment, and the breakdown of a cohabiting relationship.
How is financial disclosure managed?
You need to provide a breakdown of your financial position using a Form E, Form E1 or a mediation disclosure form, depending on your circumstances. The information provided in your form will be backed up with evidence. This may include:
- property valuations
- bank statements
- pension statements
- details of any other assets or liabilities you have
Both parties will then exchange their forms and evidence. There will often be the opportunity to evaluate and ask questions before moving on to settlement proposals.
Is financial disclosure voluntary?
Financial disclosure can be voluntary or it can be ordered by the Court. There are many alternative routes to reaching a financial settlement with your former partner outside of Court and voluntary financial disclosure will be an important step whatever route you take.
What are the advantages of voluntary financial disclosure and why would I choose to do this?
There are many reasons why financial disclosure is recommended when thinking about a financial settlement. The following are a few examples.
It will enable you to obtain valuable legal advice
The advice from your legal advisor will be limited if only minimal or no financial information is available. Without full and frank financial disclosure, your legal advisor will not be able to discuss the suitability of any settlement proposal and will struggle to help you decide what proposals to accept or put forward.
It will help you achieve a fair settlement
If both parties do not disclose all the assets and liabilities, you cannot be sure that your agreed settlement is fair. Financial disclosure will give you the opportunity to take legal and financial advice, evaluate the financial position and raise questions. This will ensure that you are well informed and will give you confidence in the final agreement.
It will help if you have concerns about your former partner’s disclosure to date
When entering into financial disclosure, you will sign a statement of truth to confirm that the information you have provided is true and accurate and that you have disclosed everything in full. There is also an ongoing obligation to update your financial disclosure if your financial position changes before an agreement is reached. Providing evidence in the form of statements and valuations will allow you to assess your former partner’s financial disclosure to provide reassurance and trust.
It will put both parties in an equal position before starting negotiations
There are many different ways to manage your finances while in a relationship and it is often the case that one or both parties are unaware of the values of the assets and liabilities. This includes both joint assets and liabilities, as well as those in the parties’ sole names. Financial disclosure ensures that both parties are fully informed of the financial position, which allows them to make fair decisions. If both parties are well informed, this should also encourage the making of reasonable and practical proposals during negotiations.
If you have any questions or need further advice or information, please view further information on financial issues arising upon Divorce and Separation here, and please do not hesitate to contact one of our specialist family law solicitors.