Financial disclosure during separation - what do I need to know?

Financial Disclosure and Form E – what is it and why am I being asked for it? 

Couples going through a separation or divorce are often asked for “financial disclosure”.  It is a term familiar to family lawyers, but most people will not fully understand what this is without an explanation.  It is the process of providing your (ex-)spouse/partner with details of your personal financial circumstances both as they are now and also an estimate of your future financial needs.

Financial disclosure is one of the first things your family lawyer will request from you, as they will need this information to advise you about the likely outcome of your case.  The type of documents you will need to show will be copies of bank statements; payslips; accounts if self-employed; values of investments; property; details of debts and pensions.

Is financial disclosure always necessary?

Without financial disclosure your family lawyer will not be able to advise you properly as to what would be a fair and reasonable settlement.  The law says that available financial resources should be split fairly (which will depend on the circumstances of each case) but it is impossible to know what a fair split is if we don’t know what the assets/debts are.  

Risks of forgoing disclosure

Some people may prefer to avoid full financial disclosure as they feel confident that they know the full financial picture of both themselves and their (ex-)spouse/partner.  This can be a risky strategy.  I had such a case a few years ago where my client confidently told me that she was happy with the division she had agreed with her husband.  When I mentioned disclosure, she was initially dismissive and felt this was a waste of legal costs.  She eventually took my advice, and it transpired that her husband had a pension fund valued at over £1m which had been completely “overlooked” in their negotiations.  She was able to renegotiate the agreement and now looks forward to a comfortable retirement, which she may have lost by not requesting financial disclosure.   

If you reach an agreement with your (ex-) spouse/partner without full disclosure and you later find out that were deceived about the other person’s financial position, there will be nothing you can do about it.  If you do have full disclosure, and later find out that you were deceived, you could apply to the court to have the matter looked at again.

What is Form E and how do I complete it?

The Form E is a 27-page form which sets out the information and documents required to deal with financial disclosure through the court.  The form is separated out into 5 sections which deal with different matters.  Section 1 covers basic details such as names and addresses, information about the relationship, details of any children and their schooling and child maintenance arrangements. 

Section 2 is the largest part of the form and requests details of your present financial circumstances.  You will be asked for documentation including a current valuation for any property in which you have an interest and a current redemption statement for any mortgages on that property, the last 12 months' statements for your bank or building society accounts, the current value of any investments in your name, details of life insurance policies and their surrender values, pension values etc. 

Section 3 sets out what you expect to need in terms of income and capital for the future for yourself and any children. Section 4 asks for details of any recent or likely changes in your assets, your contributions to the relationship, the standard of living you enjoyed and any other relevant circumstances.  If you have remarried or are living with a new partner, you will also need to give details of their assets and income so far as you know.  Section 5 gives the opportunity to say what orders you are asking the court to make (if known).  Finally, you are required to sign a “statement of truth” to verify that the information you have supplied is correct to the best of your knowledge.

Although financial disclosure can seem like a daunting process, it is an important one and will help your family lawyer to give you the most accurate advice about your case. 

If you want to discuss anything in this article please contact us.