Source: http://www.azharhussain.co.uk/what-is-financial-disclosure-in-divorce-separation-cases/
Timestamp: 2020-04-03 06:24:05
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What is Financial Disclosure in Divorce & Separation Cases? | Free Guide
What is Financial Disclosure on Divorce & Separation?
The process of financial disclosure on divorce & separation is where you will give full details of your personal financial position, resources, and future needs.
This will normally be exchanged between you and your partner. If there are financial remedy proceedings, you will also provide copies to the Family Court.
The exchange of disclosure will mean that you and your former partner have a full understanding of each other’s financial position and the information can be used to negotiate or reach a fair settlement.
The process will be ordered by the Family Court if you start formal financial remedy proceedings. However, it is very important that you consider disclosure even if you are trying to reach an agreement by negotiating with each other.
What are Financial Remedy Orders?
This is the process by which you and your former spouse or civil partner determine how to fairly distribute assets following a divorce or dissolution.
This will legally finalise how your finances will be split.
The process is also known as financial remedy and ancillary proceedings.
Is Financial Disclosure Even Needed?
The breakdown of a relationship is hard enough. When this happens, you obviously want the best settlement possible. This is fair enough. However, it does mean that you could get into disputes if you cannot agree with your former partner.
It is very important then that you have full financial information about your former partner.
Surely, it would be very difficult to agree to a settlement if you do not even know the full financial picture Remember, the finances must be split fairly and this means having access to all of the appropriate information.
There is a duty on you both to provide ‘full and frank’ disclosure.
This means that on an on-going basis you need to make sure you provide a full, clear and accurate position of your finances.
The last thing you need is for your conduct to be questioned on the basis you are not providing full and frank disclosure.
It is possible that the case outcome can be challenged if it is later found that one of you has not given full and frank disclosure.
Oh, and do not forget, you will sign a statement of truth which means that if you deliberately give untruthful information it may be a criminal offence or you may be found to be in contempt of Court.
How Do I Prepare for Financial Disclosure?
The disclosure will be exchanged using Form E. This can be found here. If you consider page 27 of this form it gives you a very handy Schedule of Documents to accompany Form E.
The process of collecting evidence means that you rely on third-party organisations. Often, when you request evidence from them, it can cause delays. So, it is important that you prepare efficiently and start to gather the documents as soon as possible.
It can save you alot of costs and delay if you do so.
How Do I Complete the Form E?
In this section, you will provide general information about the parties, background of the marriage/civil partnership, living arrangements, other court cases, details of children (including education and maintenance).
Section 2 – Part 1 – Financial Details
This will cover the financial details and includes the following:
Real Property (inc land and buildings) & Personal Assets – In this section you will give the details of all the property that you own (in your own name or jointly). You will need to attach copies of valuations (within the last 6 months) or a realistic estimate and a recent mortgage statement.
Personal Bank or Building Society Accounts. The last 12 months of statements will need to be disclosed.
Investments (including PEPS, ISAs, TESSAs, NS&Is, bonds, stocks, unit trusts, investment trusts, gifts, and other quoted securities). The latest statement or dividend counterfoil will need to be provided.
Life Insurance Policies (inc Endownment Policies you hold or have an interest in). The surrender valuation for each policy with a surrender value will need to be provided.
Information about any money owed to you. This does not include money owed to you in directors or partnership accounts (this will need to be added to section 2.11, not section 2.6).
Details of all cash sums over £500.00. This will need to include information about where you are holding the money and in what currency.
Details about all you personal belongings valued over £500.00. This will include cars (gross value), collections, furniture, pictures, jewellery etc.
Section 2 – Part 2 – Capital: Liabilities & Capital Gains Tax (‘CGT’)
This section will include all the liabilities you have including money owed on credit cards, store cards, bank loans and hire purchase agreements. It should not include liabilities that you will already add, including mortgages, overdrawn bank/building society/national savings accounts.
If any CGT will be due on the disposal of any real property or personal assets, you give your estimates of the CGT liability. This may require the involvement of a financial expert.
Section 2 – Part 3 – Capital: Business Assets & Directorships
Details of all your business interests. This will include copies of your business accounts (for the last two financial years), documentation (if available) on which you have based your estimate of the current value of your business interest. The formal valuation is not necessary at this stage. The directorships you hold or have held in the last 12 months will also need to be listed.
Section 2 – Part 4 – Capital: Pensions & Pension Protection Fund (‘PPF’) Compensation
In this section, you will detail all your pension rights and PPF compensation entitlements (inc prospective entitlements). It is important to include all of your pension plans/schemes, Additional State Pension (SERPS/S2P), Free Standing Additional Voluntary Contribution Scheme (FSAVC). Remember, this section excludes the Basic State Pension. The supporting documentation will include recent statements showing the cash equivalent (‘CE’) and valuations. This will mean writing to the pension company, administrators or PPF Board. In respect of the Additional State Pension, you will need to contact the Department of Work & Pensions (‘DWP’).
Section 2 – Part 5 – Capital: Other Assets
This section will ask you to include any other assets that you have not listed above. This can include information such as unrealisable assets, business expansion schemes, commodities, futures, trusts of interest etc.
Section 2 – Part 6 – Income: Earned Income from Employment
You will need to provide your P60, last 3 months payslips and your last Form P11D (if issued).
Section 2 – Part 7 – Income: Income from Self-Employment/Partnership
You will need to provide a copy of your last tax assessment or letter from your Accountant confirming your tax liability. It is also important to consider providing your management accounts if the net income from the last financial year is significantly different from the estimate for the next 12 months.
Section 2 – Part 8 – Income: Income from Investments
This will include examples such as dividends, interest or rental income. You will need to give details income received in the last financial year and estimate of income for the current financial year.
Section 2 – Part 9 – Income: Income from State Benefits
This is simple and straight forward. The DWP can provide this information.
Section 2 – Part 10 – Income: Any Other Income
This is a ‘catch-all section’ and you would normally need to include any other income not disclosed above.
Section 3 – Financial Requirments
This is where you will explain your income and capital needs for the future. It is very helpful to prepare a thorough budget so you can present what spend each month and how much you need in the future.
In this section, you will provide details of any significant changes in your assets and income. It will also explain contributions, the standard of living enjoyed and any other relevant information.
Section 5 – Orders Sought
This section asks for you to explain the orders you want the Family Court to make. It may be too early for you to decide as you may need to see your former partner’s financial information before deciding.
What If I Have Questions About The Disclosure?
It is possible for you and your former partner to exchange questionnaires where you can ask relevant questions about the disclosure. This means that you can challenge your former partner if they have not given full disclosure or if the information they have provided is incorrect/evasive.
“…It is very important that you find the right legal representative for you. There should be a serious consideration of alternative dispute resolution and formal proceedings should be viewed as a last resort. The right legal support can make all the difference and mean that your case can be prepared appropriately and without unnecessary costs, disputes and proceedings…”
Azhar Hussain (Solicitor-Advocate) | www.azharhussain.co.uk | Azhar Hussain Family Law Blog
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By Azhar Hussain|2020-02-19T17:59:50+00:00February 18th, 2020|Family Law|0 Comments