When planning for a separation, friends and family sometimes might recommend tucking away some money in a secret bank account. Whilst it is never a bad idea to save money, the notion of secrecy will not hold up during family law negotiations.
Obligations for financial disclosure
When it comes to dividing up the property pool following a relationship breakdown, one of the first things you will be asked is to provide information that proves your financial situation with respect to assets and liabilities, along with income and expenses.
Both you and your former partner have an obligation to provide this information to each other so that an accurate assessment can be made of the items, equity, and debt available for division, and that each of you can make an informed decision as to whether a particular settlement can or should be accepted.
What documents are required for financial disclosure?
You will most likely hear the terms “full and frank financial disclosure” or “financial discovery” referred to as you engage in the process of exchanging financial information and documents with your former partner. During this process you will be requested to provide documents such as:
- tax returns and notices of assessments
- bank, credit, and loan statements
- pay slips
- share portfolios
- property, motor vehicle, and machinery valuations of appraisals
- superannuation statements
- inheritance or gift details, and
- company and trust financial statements, bank and taxation records.
The relationship property pool will consist of all the assets belonging to you and your partner, regardless of whether a particular item is registered in joint names or individual names, like the family home and an investment property being held by each of you. Assets held with a third party will also be included to the degree of your ownership, such as a business partnership or investment property.
Failing to provide the requested details can result in delays in negotiating or settling a dispute, and can often see cases end up in court that could or should have been resolved. All of these consequences will also result in additional, and often unnecessary, legal fees.
If court orders are made for financial disclosure, then a failure to provide the required documents can result in a costs order against the defaulting party and if subpoenas are required this too can result in additional expense.
Ultimately, if there is a failure to disclose financial assets, resources, or interests to the other party of a relationship settlement, that agreement or court order can be set aside. There can be significant penalties and costs involved for the party who has formalised an agreement or court orders and falsely declared that they held no additional financial interests.
How can Sharrock Pitman Legal assist?
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
For further information contact
Ath is a Senior Associate of Sharrock Pitman Legal.
She is an Accredited Specialist in Family Law (accredited by the Law Institute of Victoria). For further information, contact Ath on her direct line (03) 8561 3319.