What is Disclosure in a Divorce?
To determine how assets will be divided in the divorce, you, your spouse and your respective legal counsel will need to know what those assets are. Disclosure is the process by which all parties get information regarding the other’s income, assets and debts. It is crucial that all parties are honest and forthcoming with financial information if they want to reach a fair divorce settlement quickly.
How to exchange financial disclosure
Usually, disclosure is a voluntary process that is done by filing a Notice to Disclose. If, however, your spouse refuses to disclose their financial information, you may request that a court order be made against them. That way if they continue refusing to disclose financial information, you may take legal action.
What are the consequences of hiding assets from your spouse during a divorce?
The court may also intervene if a spouse gives false information in disclosure as lying during divorce proceedings is illegal. There was recently a case in Ontario where a husband was discovered to have given false financial information regarding his income in divorce disclosure. The courts, in turn, awarded the wife a 100% interest in the property they had once shared.
Although the couple’s divorce had been finalized in 2004, the decision was not made until 2016 after the woman discovered there were discrepancies in her ex-husband annual income and the declarations he made during financial disclosure. The courts decided that the man’s actions were unconscionable and ruled that their previous divorce agreement, which gave the ex-husband a 50% share of the home in which the woman and their children lived, was invalid and gave the woman full ownership of the property.
Disclosure and child support
In addition to being used to decide how assets will be divided in a divorce, disclosure is also needed to determine the appropriate amount each parent will pay for child support. Both parents are legally obligated to financially support their children after their separation and divorce. There are two types of income disclosures that are used to calculate child support—initial and ongoing.
Initially, both parents will need to provide complete financial information dating back three tax years. Where there is a shared or split custody agreement, special or extraordinary expenses, claim of undue hardship or if the child is of the age of majority or one of the spouses was acting as a step-parent to their partner’s child, both parties will need to provide financial disclosure for the appropriate child support to be determined. If one parent will have sole custody and none of the above situations apply in your case, only the parent who will be paying child support is required to provide his or her income information.
Even after a child support order or agreement is made, there is still a legal obligation to ensure that your children receive fair support based on up-to-date income information. Therefore, the Supreme Court of Canada says that parents should inform each other when there is any change in their income.
If a parent refuses to supply complete and current income information when asked to do so, the court can order that they provide the information. If they still refuse, the parent may be held in contempt of court and may be required to pay fines or face imprisonment. If it is discovered that a parent did not disclose true or updated financial information, a retroactive order may be made for them to pay child support owed from the time their income increased. The parent at fault may even be required to pay the other parent’s legal fees.
Do you need a divorce settlement lawyer to help with disclosure?
If you are in Toronto and you are planning to get a divorce, contact the divorce settlement lawyers at Baker and Baker Family Law. At Baker and Baker Family Law, we have a team of experienced divorce settlement lawyers who will help you with financial disclosure and any other matters that arise from your divorce. So, give us a call today to schedule and legal consultation with one of our divorce settlement lawyers. Let us show you how we can help.