Financial disclosure is a term that is often used by lawyers and the Courts when parties are trying to resolve a financial settlement during the complex process of divorce. One of the first things you will be asked following a relationship breakdown is to provide information that proves your financial status in the most honest and transparent way possible.
Duty Of Disclosure
It is both you and your ex-partner’s legal obligation to provide this information to each other as an accurate means of assessment. This includes information recorded on paper, digitally stored information and documents that the other party may be unaware of. This is known as “duty of disclosure
” and is an integral component of any financial and/or parenting cases.
Duty of disclosure starts before your case commences and continues right until the moment your case is finalised.
Both parties are required to provide updated documents in the event that circumstances change as well as additional documents that may come into their possession within this timeframe.
Documents are considered relevant if they:
- Are able to verify the nature and extent of the asset pool (assets, liabilities and other financial resources) of one or both parties that will be the subject of division. Some of these include: Assets and liabilities held in each party’s separate and/or joint names; Assets and liabilities held within any trusts or companies in which either or both parties have an interest.
- Able to verify the nature and extent of the current and future income from employment and/or other sources such as a trust or company.
- Documents that relate to the issue in dispute in the property settlement such as the contributions each person has made to the asset pool and factors relating to what each individual may require to support themselves in the future.
Documents You Will Need To Provide
Rule 13.01 of the Family Law Rules
expressly states that ‘each party to a case has the duty to provide a full and frank disclosure of all information relevant to the proceedings in a timely manner’. Generally, the types of documents that both parties will be required by law to produce include:
- Bank, credit and loan statements
- Centrelink statements
- Shared Portfolios
- 3 most recent tax returns and notices of assessments.
- Superannuation statements
- Inheritance or gift details.
- Documents to evidence any assets disposed of or sold in the 12 months prior to separation.
- Documents that verify both party's financial positions at the beginning of the relationship such as bank statements, valuations or purchase documents.
- Property, motor vehicle, and machinery valuations of appraisals.
- Company and trust financial statements, bank and taxation records.
While this list is not exhaustive, the advice is to gather as many documents as you possibly can to verify the nature and extent of the asset pool, as well as the extent of your contributions made during the relationship.
Failure To Disclose
It is important to note that the failure to disclose relevant documents may result in lengthy delays in negotiating or settling your dispute, and can often lead up to cases in court that result in additional, and often unnecessary, legal fees. Failure to provide full and frank disclosure of all documents will also be typically seen as evidence of hiding assets and will only be to your detriment. There are significant penalties involved for any individual who has formalised an agreement or court order with false declarations with regard to financial interests.
Financial disclosure matters can be overwhelming during an incredibly difficult time in your life, which is why it is always recommended that you seek legal advice from a trusted family lawyer. If you have any questions or are in search of legal advice from a family law expert, do not hesitate to call us at (03) 9670 7577