This document provides general guidance regarding financial disclosure. Your family lawyer will be able to provide specific advice based on your circumstances.
What is financial disclosure?
Financial disclosure is the process of giving to your spouse or partner, and to the court, full details of your personal financial circumstances and your future needs and resources. It is usually the first thing your family lawyer will ask you to do, as they will be unable to advise you properly about the likely outcome of your case without having a full picture of where both of you are placed financially.
In financial matters, disclosure is essential whatever process you intend to use to achieve a solution: in or out of court. If you do start to use the court process the court will order both of you to complete financial statement (a form called Form E) before the first court hearing. In non-court processes such as mediation or collaborative law, you are likely to be asked to use a similar document.
Why is financial disclosure necessary?
Both of you need to have full financial information before you can agree how your financial arrangements should be separated out as the law says that the available resources must be split fairly. It is not possible for you, your lawyers or a court to know what will be a fair solution unless everybody knows the full financial picture.
You will have to verify the information in Form E with a statement of truth and giving deliberately untruthful information may be a criminal offence or contempt of court. If a court order or agreement is later found to have been based on inaccurate information it is possible to ask the court to reopen the case and make a new order.
How can I prepare for giving financial disclosure?
It will help your solicitor and control your costs if you are able to be efficient and organised in collecting together your financial information. This may mean getting a lever-arch folder and some section dividers and starting to put together copies of all the documents and information you will need to complete financial disclosure, as soon as you can.
Some information, such as that regarding pensions, may take a while to come through and can delay progress, so it is worth asking your pension or life insurance provider for information early on if you don’t have it to hand. You may also need to talk to an accountant if, for example, a calculation of potential tax liabilities is needed, or to get up-to-date accounts for any companies or if you are self-employed.
How do I complete Form E?
Section 1: this covers basic details such as names and addresses, information about the marriage or civil partnership, any children’s educational arrangements and any child maintenance being paid.
Section 2: this is the bulk of the form, and concerns your present financial circumstances. You will need to supply the following information and documentation:
- for all of the property you own either jointly or in your own name, up-to-date mortgage statements and evidence of its approximate value (such as an estate agent’s appraisal)
- for all of your bank or building society accounts, the last 12 months’s statements
- the current value of any investments in your name (shares, ISAs, unit trusts etc)
- details of life insurance policies and their surrender values
- details of any cash you have, in any currency, over £500
- details of any personal belongings worth over £500 (eg cars, paintings, antiques etc)
- details of debts, such as credit cards and bank loans
- any actual or potential capital gains tax liabilities, eg on investment property or shares
- business assets—if you are a company director or in partnership, or run a business, you need to provide company accounts and various other documents
- pension valuations—either a recent yearly statement or by request from your pension provider
- details of your earned or self-employed income, with payslips and/or tax returns in support, along with any unearned income you receive (eg from investments) and any state benefits you receive, and
- details of any interests you have under a trust or any imminent inheritances
Section 3: here you set out what you need in terms of income and capital for the future. The income section requires you to prepare a future monthly budget so you can work out what you spend each month and how much you really need to live on. This section needs some care, as budgets can be a major source of disagreement because of their connection with the amount of maintenance a court might order to be paid between the two of you. There are two sub-sections: one for you and the household, and one for any children living with you.
Section 4: this part requires you to explain any recent or imminent changes in your assets, set out your contributions to the marriage or civil partnership, the standard of living you enjoyed and any other relevant circumstances, so that the court and the lawyers have as complete a picture as possible of your individual situation. If you have remarried or are living with a new partner, you will also need to give details of your spouse or partner’s assets and income so far as you know them.
Section 5: this part asks you what orders you are asking the court to make, although it may be too early for you to say.
Finally, the statement of truth must be signed, either by you or by your lawyer.
Is there anything else?
Although Form E, or its equivalent in a non-court process, is the bulk of the financial disclosure you will have to provide in financial proceedings, there may be issues arising from it that need to be clarified. Each of you will have the opportunity to ask questions about the other’s financial disclosure so that you have all of the information needed to get to a resolution. Questionnaires are prepared and exchanged three weeks after Forms E are exchanged so that they can be discussed at the first appointment in court and answered after that. Expert evidence may also be required to supplement your financial disclosure, eg a property valuation by a surveyor.
There is a continuing obligation to give financial disclosure throughout proceedings if circumstances change
and you will need to update it before a final hearing if much time has passed since Form E.