Source: http://www.lsuc.on.ca/with.aspx?id=2147491037
Timestamp: 2017-02-28 01:05:42
Document Index: 147513624

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Updated November 2016This How-To Brief outlines the steps to take when preparing a financial statement.
Step 1: Determine which financial statement form is requiredStep 2: Calculate income and expenses - Parts 1 - 3Step 3: Calculate property and debts - Parts 4 - 5Step 4: Calculate property and debts at date of marriage - Part 6Step 5: Calculate excluded property - Part 7Step 6: Disposal of property - Part 8Step 7: Calculate child budgetStep 8: Attachments to the financial statementStep 9: Requirement to Certify Financial DisclosureStep 10: Ongoing financial disclosure: updating the financial statementResourcesStatutes and Rules
1Determine which financial statement form is required
(Support Claims) Family Law Rules (Forms):When making or responding to a claim for support, but not making or responding to a claim for property or exclusive possession of the matrimonial home or its contentsReview Rule 13(3.1) and (3.2)If you are required to serve and file a financial statement in relation to support, you must serve at the same time as the financial statement the following:a. the income and financial information
referred to in subsection 21(1) of the child support guidelines;b. if you (or the client) became
unemployed in the last three years:i. a complete copy of the party’s Record
of Employment (or other evidence of
termination); and,ii. A statement of benefits of income
that you (or the party) is still entitled to receive from the former employer
despite or as a result of the terminationc. If you are claiming child support,
provide proof of the amount of any special or extraordinary expenses within the
meaning of section 7 of the Child Support
Guidelinesalways in the Ontario Court of JusticeForm 13.1
(Property and Support Claims) Family Law Rules (Forms):When
making or responding to a claim for property or exclusive possession of the
matrimonial home and its contents, whether or not a claim for support is includedReview Rule 13(3.3) and (3.4)No
later than 30 days after the day by which the financial statement is required
to be served, you must serve on the other party pertinent
documents (see the Rule)Always
in the Superior Court of JusticeDivorce-mate
offers a blank Form 13.1 Financial Statement with instructions which can be
sent to the client for the client’s initial draft.See the
link to the above-listed Family Law Rules forms in the Resources
section of this How-To Brief2 Calculate income and expenses - Parts 1 - 3
Income and BenefitsSet out income for a specific (current) time period.If self-employed, may be appropriate to use last year's income with explanation.If wage-earner, use present or future income.Include every source of income whether taxable or non-taxable (e.g., gifts, lottery winnings, investment income (interest, dividends, capital gains), employment insurance, pension, CPP, OAS, RRSP withdrawals).If necessary, note and complete "Schedule A" to the Financial Statement form: "Additional Income Sources"Note hybrid income - both income and capital such as stock options; treat this income as Canada Revenue Agency would.Other benefits are to be included in income such as a company car, health/life/disability insurance benefits, sports/gym/club memberships.
Set out expenses for a specific period.Ideal to use the last 12 months of cohabitation if reflective of current situation.May have to use two expense calculations: one for the intact family and one for the family since separation (can use Proposed Budget area of form).Note any expenses that the other party still pays (include it and then provide an explanation).Do not exaggerate the expenses, strive for accuracy and completeness.List expenses that are not separately described/categorized on the form in the appropriate column.Retain receipts in an orderly fashion for questioning and proof.See link to Sample Document 1 in the Resources section of this How-To Brief, which lists examples of specific expenses.
Must be completed in full if making or responding to a claim for spousal support or "undue hardship"
3Calculate property and debts - Parts 4 - 5
Review Part I of the Family Law Act and in particular, section 4.Gather and compile in a disclosure brief the supporting documents for as many of the listed assets and debts as possible.
Property (Part 4)
Note the dates set out in the financial statement: Date of Marriage,Valuation Date (most often the date of separation) Statement Date (the date the financial statement is being completed).Clarify each of these dates in the statement; ensure consistency with the pleading (Application or Answer, as the case may be).List only the property owned (as opposed to "used" or "possessed") by the client on the applicable dates.Show 50% interest and value for jointly-owned assets as “joint @50%”Note whether or not the joint tenancy for jointly-owned assets is intended to be severed.Use market value, not purchase price or replacement value.
Debts and Other Liabilities (Part 5)
List only debts owed by client on the applicable dates.List one-half value of the debts owed jointly as “joint @50%”Include contingent or future debts, such as deferred personal taxes, capital gains tax and costs of disposition (e.g. for real estate, RRSP's, and pensions).Consider appropriate discounts, e.g., net present value, minority shareInclude debts to parents, friends and other relatives.
4Calculate property and debts at date of marriage (Part 6)
List all property owned and debts owed on the date of marriage.Gather and compile in a disclosure brief the corresponding supporting documents / evidence.Note: A home owned on the date of marriage, which is a matrimonial home on the valuation date, does not entitle the owner to a "deduction" from net family property on the date of marriage (unless the parties previously signed a Domestic Contract with such a term). Any associated mortgage debt is omitted, too. [Review s. 5 of the Family Law Act].
5Calculate excluded property (Part 7)
Review s. 4(2) of the Family Law Act.Include inheritances and gifts acquired after the date of marriage from third parties.Also include insurance proceeds, damages for personal injuries.List property that can be traced clearly.Note: Excluded property is included elsewhere in the financial statement and in this category as well. The values would be the same in each.
6Disposal of property (Part 8)
Disclose all property by category that was disposed of in the two years prior to the making of the Financial Statement or during the marriage (whichever is shorter).
7Calculate child budget
There may be some situations where a child expense budget is required. For example, if the child is over 18 years of age, in "shared custody" situations under section 9 of the Child Support Guidelines, or in relation to claims for special or extraordinary "section 7" expenses.List the expenses that are clearly child-related.List the differences in those expenses where higher amounts are directly attributable to the children.
8Attachments to the financial statement
The financial statement will not be accepted for filing in the court office (Rule 13(7) of the Family Law Rules) unless: copies of the client's notices of assessment for the previous three taxation years are attached, orthe financial statement contains a sworn statement that the client is not required to file an income tax return pursuant to the Indian Act.If a client did not file tax returns and/or does not have Notices of Assessment for the last three years, contact the CRA at 1-800-959-8281 for a copy of an Income and Deduction printout.Recent pay stub, pension stub, Employment Insurance stub, Worker's Compensation stub or proof of any other sources of income (Rule 13(6) of the Family Law Rules) should be attached.Income tax returns attached to the financial statement must be served on the other party(ies), but need not be filed in the Continuing Record unless the court orders otherwise (Rule 13(7.1) of the Family Law Rules).(See the link to the above-listed Family Law Rules form in the Resources section of this How-To Brief)
9 Requirement to Certify Financial DisclosureReview Rule 13 (5.0.2)Serve a certificate of financial disclosure (Form 13A) and file no later than seven days before a case conference (for the applicant or moving party) and no later than four days before the case conference (the other party)10 Financial disclosure: updating the financial statement
The Family Law Rules require the financial statement to be updated and corrected from time to time (see chart in "Guide to Procedures in Family Court", in the Resources section of this How-To Brief).If the financial statement is more than 30 days old, you must serve a new financial statement or Affidavit indicating that there is no change in the financial statement or that the change is minor, and detail change - Family Law Rules Form 14A, Affidavit.Correcting information: you must also serve a new financial statement to correct or complete information or, serve Affidavit (Family Law Rules, Form 14A) if changes are minor.Review Rule 13(13.1). If the financial statement is updated, you must serve an updated Certificate of Financial Disclosure and file it with the court at least seven days before a conference (the applicant or moving party) or at least four days before the conference (the other party).(See the link to the above-listed Family Law Rules form in the Resources section of this How-To Brief)
Sample Document 1: Completed Financial Statement Form 13.1See the Guide to Procedures in Family Court (section 8) for chart on updating the financial statementMinistry of the Attorney General - Family Justice Matters This website provides the Family Law Rules and Forms, sample documents, fee schedules, addresses of the courts, and other relevant family law information.Sample Net Family Property StatementDivorcemate website
Family Law RulesFamily Law RulesFormsFamily Law Act
Bhoi v. Bhoi 23 R.F.L. (5th) 255 (Ont. S.C.J.)A lawyer representing a family law client must ask the client pertinent questions, identify ambiguities and seek clarification of financial information and then relay the information to the court.Buttrum v. Buttrum 15 R.F.L. (5th) 250 (Ont. S.C.J.)A family lawyer must supervise the client’s completion of the financial statement The lawyer must ask the client pertinent questions so as to ensure that the disclosure is accurate and complete