In this article, Laura Bailey, Solicitor in JMW’s Family Law team, explains what financial disclosure actually means, what information may need to be provided and why getting the process right is so important when resolving the financial arrangements following divorce.
If you are separating and your finances include a business, inherited wealth, trusts, or complex remuneration, you may be unsure what you must disclose — and how much information your spouse must provide. Financial disclosure within divorce and financial remedy proceedings is designed to establish a reliable picture of the available resources before decisions are made about the outcome.
When deciding how finances should be divided, the court considers all the circumstances under section 25 of the Matrimonial Causes Act 1973. These include each person’s income, earning capacity and property. An asset must still be disclosed if it is held in one spouse’s name, located overseas or inherited. However, disclosing an asset does not necessarily mean that it will be shared.
What must be disclosed?
Disclosure usually covers property, bank accounts, investments, liabilities, pensions, income, expenditure, tax, business interests, trusts, cryptoassets and overseas wealth. It also extends to material future changes, such as a business sale, bonus, inheritance or trust distribution. The duty of disclosure is continuing, so information must be updated if circumstances change before settlement or final hearing.
In court proceedings, financial information is normally provided in a document called Form E, as required by the Family Procedure Rules 2010. Each person signs a statement confirming that the information is true and provides supporting documents. These commonly include bank and investment statements, property and mortgage information, tax returns, business accounts, payslips, pension valuations, trust documents and evidence showing the source of inherited or gifted wealth.
After exchange of financial disclosure, each party may raise proportionate questions. The court can direct further disclosure and, where necessary, permit expert evidence on matters such as business, property or pension valuation.
If you want to resolve matters without going to court, financial disclosure can also take place voluntarily through solicitors, mediation, collaborative law or arbitration. Whatever route you choose, both parties need full information to understand the financial position before negotiating a settlement.
Complex and high-value finances
For a business owner, headline accounts may not reveal the full picture. Disclosure may need to address group structure, recent management accounts, forecasts, dividends and liquidity.
Inherited, gifted and pre-marital assets must also be disclosed. Their source, treatment and use may affect whether they are regarded as matrimonial or non-matrimonial, and how they are factored into a settlement. Evidence should trace receipt, reinvestment and any use for the family.
Trust interests require similar care: the trust’s terms, underlying assets, distributions and practical history of support may all be relevant.
What if disclosure is incomplete?
An honest mistake that is corrected quickly is different from deliberately hiding information or assets. This is known as non-disclosure. If important information is missing, the court can require further answers or documents, obtain evidence from third parties or allow an expert to investigate. The court may also make assumptions against the person who has failed to provide the information and order them to pay some of the other person’s legal costs. If the missing information is serious enough, a financial order may be reopened or set aside.
If you suspect that information is being hidden, you should not try to obtain it unlawfully. Do not access private email, cloud accounts or confidential business records without permission. Keep any documents already lawfully in your possession secure and take legal advice before using them.
How JMW can help
JMW’s family team can help you identify the information that matters. Where required, we can coordinate advice from accountants, pension experts, tax advisers, trustees and overseas lawyers. We help clients explain business value, liquidity, inherited wealth, trust interests and complex remuneration. If important information is not being provided, or there is an urgent risk to your financial position, we can advise on protective court applications and the most effective way to move matters forward.
If you are concerned about the extent of the financial information you need to provide, or whether your spouse’s disclosure is complete, early advice can help you protect your position and avoid unnecessary cost. Speak to JMW’s family team about the most proportionate next step for your circumstances.
