Once parties have come to terms with a separation and divorce, difficulties and challenges often arise when trying to negotiate a financial settlement. Part of the process when negotiating a financial settlement is for there to be financial disclosure.
If you are going through the divorce or separation process and would like to seek expert legal advice and assistance regarding division of assets, please get in touch with one of our experienced family law solicitors by calling 0800 086 2929, emailing info@elitelawsolicitors.co.uk are completing our Free Online Enquiry Form.
In addition to office meetings, we also offer remote meetings via telephone or video conferencing software so can assist you wherever you are based.
What is Financial Disclosure?
One of the first questions solicitors are often asked when first meeting with clients is “what will I get from the matrimonial assets?”. However, it is impossible to give comprehensive advice as to a fair settlement without seeing the other party’s financial disclosure.
Financial disclosure for divorce is the process where you provide details of your income, assets and liabilities usually using a Financial Statement known as a Form E. The Form E is supported by documents which provide evidence/proof of the income, assets and liabilities that have been disclosed in the form. It enables a solicitor to establish the value of the ‘matrimonial pot’ as well as the needs of the parties.
Using a Form E is mandatory when Court proceedings have been issued but it is also commonly used for voluntary financial disclosure due to it being such a detailed and thorough statement. Voluntary financial disclosure takes place by agreement between the parties when they are trying to negotiate a settlement, usually with the assistance of their solicitors, and avoid going to the Court where a Judge may order how the assets will be distributed.
Once financial disclosure has been provided, the Court is able to consider what is in the ‘matrimonial pot’ and distribute the assets fairly.
What is a Form E?
The Form E is a lengthy form otherwise known as a Financial Statement and it is used to detail all of your income, assets and liabilities with supporting evidence/documents. It is a very detailed form and on first glance, completing the form can seem a very daunting process. However, it is often the case that not all sections apply. It covers most assets that can be thought of as well as providing some background information about the parties including details of the marriage and children as well as details about how they believe the assets should be divided.
The Form E is a very important document, so much so that at the end you have to sign a Statement of Truth confirming that full, frank, clear and accurate financial disclosure has been provided. Therefore, it is essential to obtain assistance from an appropriately experienced family law solicitor to ensure that the form is completed correctly and accurately.
What does Financial Disclosure for divorce involve?
Financial Disclosure involves completing the Form E and providing the supporting documents. It is important you seek legal advice as early as possible when completing the Form E as there can sometimes be delays in obtaining the evidence required. One of our experienced family law solicitors can go through the form with you to ensure that all of the information is correct and accurate and that nothing has been missed.
Once the Form E has been finalised and signed, it will be exchanged with the other party and your solicitor will then look through their Form E and documents with you and discuss the contents.
What documents do I need to provide for Financial Disclosure?
For each income, asset or liability you have, evidence must also be provided in support. For example, bank statements for the last 12 months, a recent mortgage statement, wage slips and P60, pension valuations and business accounts. Each section of the Form E tells you what documentation you are required to provide and there is also a helpful checklist at the end.
When assisting you, we will also tell you what additional documents should be provided in support as part of your ongoing duty to provide full and frank financial disclosure.
You will also be required to provide details of your income needs including day to day living costs such as rent or mortgage costs, cost of utilities, groceries, clothing and self-care. We can provide you with a helpful schedule to assist with this process.
What happens after Financial Disclosure for divorce matters?
Once financial disclosure has been exchanged, whether that is voluntarily or within the Court proceedings, your solicitor will review the financial disclosure with you and will send a list of questions to the other party about their Form E which can often widen the scope of the financial disclosure provided by the Form E.
This list of questions is known as a Questionnaire. This could be questions about anything that has been missed from the Form E or questions about any income, assets or liabilities that have been disclosed but need to be clarified or that require more information. It could include asking to see a wider range of documents on specific assets that have been disclosed or asking to see documents that should have been disclosed but have not been. It could also include asking questions about the supporting documents that have been provided such as items on bank statements.
Once satisfied that full and frank financial disclosure has been provided, discussions can take place as to settlement and your solicitor will discuss settlement offers with you.
Why is Financial Disclosure important?
Having a fully completed Form E with supporting documents which includes replies to questionnaires, allows a solicitor to give clients the broadest and best advice as to possible outcomes. Without financial disclosure, it is extremely difficult to distribute assets fairly and to advise if a settlement offer is fair.
Do I have to provide full Financial Disclosure for divorce?
You have an ongoing duty to provide full and frank financial disclosure. It is sometimes suggested that this duty only arises when Court proceedings have been issued but this is not the case.
The duty to provide full and frank financial disclosure exists between parties even when they are trying to resolve the matrimonial finances by way of voluntary financial disclosure.
Can I refuse to provide Financial Disclosure and what happens if there is a failure to provide Financial Disclosure?
Failure to provide full and frank financial disclosure makes it very difficult for there to be meaningful negotiations as to settlement and creates delay and added costs at what is already a stressful time. If full and frank financial disclosure is not provided within the voluntary financial disclosure process, then there may be no option other than to apply to the Court for Financial Remedy Proceedings.
If, within the Court proceedings, full and frank financial disclosure is not provided, there can be consequences for the non-disclosing party which include:
- The Court drawing adverse inferences from the non-disclosure
- If the non-disclosure is discovered after an Order has been made, then in some circumstances, the Order can be challenged and may lead to it being set aside
- Cost Orders can be made against the non-disclosing party and whilst this does not assist with obtaining the missing disclosure, it does act as a punishment
- The party that has failed to provide full and frank financial disclosure can be found to be in contempt of Court. Remember, a Statement of Truth on the Form E is signed confirming that full, frank, clear and accurate financial disclosure has been provided and there is a warning at the bottom of the Statement of Truth to say that proceedings for contempt of court may be brought against you if you have signed the statement when you have knowingly failed to provide full, frank, clear and accurate financial disclosure. If the non-disclosing party is found to be in contempt, this can result in them being fined or imprisoned.
- It may be decided that the non-disclosing party has committed fraud by failing to provide disclosure which could lead to a fine or imprisonment.
There are remedies available to try and resolve the issue of non-disclosure which include looking at publicly available records such as the Land Registry or Companies House. If you are faced with a party that you believe is failing to provide full and frank financial disclosure then there are disclosure orders that may be available however, it is important you seek legal advice from a specialist family solicitor in this regard.
How Elite Law Solicitors can help
Financial disclosure is the bedrock for any process dealing with the division of assets following the breakdown of a relationship. It is an integral part of the financial settlement process following a divorce or separation, particularly in high net worth divorce cases where assets may be complex, substantial or spread across multiple jurisdictions.
Victoria Clarke is a Senior Partner and the Head of our Family Department. She has extensive experience of advising and assisting clients on financial settlement following a divorce or separation. She possesses the experience, legal expertise and practical know-how to guide you through the process efficiently whilst obtaining the best possible outcome for you.
Victoria regularly provides specialist legal advice on financial settlements to clients all over the country. In addition to office meetings, she offers remote meetings via telephone and video conferencing software and can assist you wherever you are based.
Make a Free Enquiry
If you have any queries relating to any of the issues discussed in this article or would like any advice or assistance in relation to a financial settlement following a divorce or separation, please make a free enquiry by calling 0800 086 2929, emailing info@elitelawsolicitors.co.uk or completing our Free Online Enquiry Form.
The content of this article is for general information only. The information in this article is not legal or professional advice. If you require legal or professional advice you should obtain independent expert advice from qualified family law solicitors such as those within our firm.
