financial papers

Why It Is Important to Provide Full Disclosure of Your Income and Assets in a Family Law Case

 

The end of a relationship brings about the untangling of both emotional and financial aspects of a couple’s lives.

 

From a financial perspective, it will be necessary to value and divide family property, allocate responsibility for debt and ensure that the proper amount of child support and spousal support are paid. Those issues cannot be resolved without proper financial disclosure and for that reason, both BC’s Family Law Act and Canada’s Divorce Act require the exchange of financial information in family law cases. In this post, our BC family lawyer will explain why it is important to provide full disclosure of your income, expenses, assets and debt in a family law case.

 

1. Full disclosure is necessary to ensure that all issues are fairly addressed

The exchange of financial information gives both spouses the opportunity to see the full picture – to know what issues are at stake and what types of claims they have. Important matters may be overlooked if financial information is lacking and unfair bargains will be struck if the full financial picture is hidden. Where full disclosure is made, spouses can get appropriate legal advice, make or evaluate offers to settle and assess their chances of success if litigation is necessary.

 

2. Non-disclosure or delayed disclosure will impede resolution

Whether the spouses and their lawyers are working on a separation agreement or litigating the family case before the BC courts, failure to provide financial disclosure will bring progress to a stand-still. If one or both parties does not provide timely disclosure, resolution of the matter may be delayed until the necessary information is exchanged. All of this will prevent the parties from moving on with their lives and can have the effect of driving up legal costs. Conversely, the parties can save time and money by providing adequate financial disclosure from the outset.

 

3. A separation agreement made without full financial disclosure may be set aside

If a spouse withholds material information about substantial assets, debts or income while negotiating a separation agreement, the agreement can be challenged by the other spouse at a later date and may be set aside by the court due to significant non-disclosure.

 

4. The courts will impute income or attribute values if proper disclosure is not provided

A party in a family law case may hide or manipulate their income or assets in an attempt to reduce their child support or spousal support obligations or to hinder the other party from getting a share of the property. Withholding of information pertaining to income and assets will damage that party’s credibility. It can also backfire as the court can impute higher guideline income for child support or spousal support purposes where there has been inadequate or misleading disclosure. The court can also make adverse inferences against a party who withholds financial information or who deliberately attempts to undervalue assets. The court can also order that party to repay a spouse for property transferred to frustrate that spouse’s interest in the property.


5. A party can be penalized by the courts for failure to meet disclosure obligations

BC’s Family Law Act gives the court the power to remedy non-disclosure or disclosure that is incomplete, false or misleading. The court can order a party to litigation to provide financial information by a certain date and can penalize that party if they fail to follow the order.

 

The court may also make an adverse inference against the non-disclosing party, order that party to pay a fine, or order them to pay all or part of the expenses reasonably and necessarily incurred by the other party as a result of the non-disclosure of information. The court also has the discretion to hold a non-disclosing party in contempt of court with the consequences of a fine and jail being possible outcomes if contempt is declared.

 

The bottom line on why full financial disclosure is important in a family law case

 

Full and frank financial disclosure is essential to the resolution of a family law case. Failure to disclose income and assets is treated very seriously by BC courts. The late Honourable Mr. Justice P. Fraser once ruled that non-disclosure in family law matters is “the cancer of matrimonial property proceedings.”

 

If you are in the process of separating or seeking a divorce, contact Valerie M. Little for advice. Ms. Little is an experienced BC family lawyer who can advise you on what financial information you need to produce to meet your disclosure obligations. Ms. Little can also ensure that your spouse provides all necessary financial disclosure and can conduct research and investigation if you suspect that your spouse is hiding assets or financial information.

 

Do not settle for less than you deserve due to insufficient financial information. For more information about our family law office or to schedule a consultation with our divorce lawyer, please call us today. We are here to help.

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