Divorce can be a turbulent time filled with a lot of emotion, including anxiety, anger, and uncertainty about the future. If the divorce also involves a contested custody dispute, the parties must often deal with an additional layer of conflict.
Understandably, there may be instances during the divorce process where one or both sides feel hesitant to fully disclose all of their financial information. When you’re hurt and upset, you already feel vulnerable. Divulging what most people perceive as intensely private information can make you feel even more exposed.
When it comes to family law disputes, however, full financial disclosure is the law. More importantly, failure to provide complete disclosure of your finances can invalidate an agreement (whether through negotiations or court proceedings) which you worked so hard to achieve.
Ontario Legislation Requires Full Financial Disclosure
Whether you’re going through a divorce, pursuing a motion to change custody or child support after your divorce is final, or litigating another family law matter, the Ontario Family Law Act and the Family Law Rules (which govern litigation matters) require both sides to fully disclose their income, assets, debts, and expenses through a sworn financial statement. Although locating and listing all this information can be a cumbersome, time-consuming process, it is absolutely essential to ensuring any agreement reached is both fair and legally enforceable.
More importantly, a family law agreement can be set aside if a party fails to comply with the disclosure requirements of the Family Law Act. Section 56(4)(a) provides:
“A court may, on application, set aside a domestic contract or a provision in it, if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made…”
Ontario courts have set aside family law agreements (and consent orders where based on Minutes of Settlement) upon discovering that a party failed to fully disclose his or her income, assets, debts, or expenses.
What if You and Your Spouse Reach an Amicable Settlement Agreement?
In some cases, couples are able to settle their disputes with minimal conflict. When they do, they typically wonder whether they can simply skip over the financial disclosure requirement. After all, why go through all the hassle and expense of filling out a sworn statement when you agree to everything? Just because you’ve reached an amicable settlement does not mean you’re exempt from making full disclosure since you cannot really know (nor can a lawyer advise you) what you are agreeing to until full financial disclosure has been exchanged. Section 56(4)(a) makes no distinction between contested and uncontested agreements. Protect yourself – and your agreement – by fully complying with the disclosure requirements of the Family Law Act.