Financial Disclosure in Family Law
- March 29, 2021
- Posted by: admin
- Category: Property and Financial Settlements
Parties involved in a Family Law matter have a duty to disclose to the court and to the other side certain financial information which is relevant to an issue in their case, which is in their possession or which they have authority or ability to contain. This is called the “duty of disclosure” as set out in Rule 13.01 of the Family Law Rules 2004.
This duty is to provide full and frank disclosure of all information relevant to their respective financial circumstances and the matrimonial property. This duty commences immediately and continues until the matter is resolved on a final basis.
What is full and frank disclosure?
Rule 13.01 of the Family Law Rules 2004 highlights that this “duty” is one of full and frank disclosure thereby extending to all financial documents, even those which may not assist the party’s case.
This duty applies to income, assets, shares and any other financial resources which includes any relevant parenting expenses. In Family Law matters that include children, the financial disclosure of both parties is to include any relevant financial information surrounding parenting. This includes but is not limited to: medical reports, school fees, child support payments, Centrelink benefits received for the care of the children, any extra-curricular activities etc.
Disclosure also includes financial resources and any assets that the individual may have an interest in, such as a family trust to which they are trustee or beneficiary, a current deceased estate that is in the stages of probate and administration and any property that they may have an equitable interest in, regardless as to whether their name is on the title.
Additionally, any interests and earnings of property that go to a third party such as a child, de facto spouse, trust or company. In this case, an independent evaluator can be required to assess the value.
It is also important to note that any property that has been disposed of, gifted or transferred in the year prior to final separation is also to be included in the disclosure as it is deemed to be assessable in regard to the settlement agreement. This includes, receipt of inheritances, receipt of lottery or other windfalls, losses of significant sums of money etc.
What documents must be disclosed?
A list of the types of documents that must be disclosed in a Family Law matter are:
- Income and employment e.g. payslips and tax returns.
- Financial institution e.g. bank statements, mortgage documents, loan agreements and credit card statements.
- Real estate e.g. contracts for the purchase or sale, original or copy certificates of title and valuations or market appraisals.
- Business income e.g. annual financial accounts, profit and loss statements, bank account statements, articles and memorandum of association, leasing and hire purchase agreements.
- Share and debentures in public companies or institutions e.g. details and records of any investments and debenture certificates.
- Social welfare e.g. detail of any social security pensions or payments.
- Maintenance, spousal or child support e.g. any documents relating to the receipt or payment of any amount of maintenance payable.
- Fringe benefits e.g. any documents relating to any benefits received through employment.
- Tax e.g. copies of income tax returns and taxation assessments.
- Other sources of income e.g. distributions from a trust or estate and dividends.
- Insurance policies.
- Superannuation e.g. recent member statement and policy document.
- Trust fund e.g. copy of the trust deed and annual accounts or tax returns for the trust.
- Motor vehicles e.g. registration certificates, appraisals or valuations.
- Valuations of any items of furniture and jewellery.
When does the duty to disclose apply to me?
If you are a party to family law proceedings, whether it be parenting or property proceedings, this duty applies to you. The duty to disclose first arises in the pre-action stage of the proceedings (that is, before the case starts) and continues until final orders are given and the case is finalised.
Does the other party have access to my financial information?
Yes, the duty to provide full and frank disclosure means that you must provide it both to the court and to all other parties involved. The same duty applies to the other side requiring them to disclose to you all their sole assets and liabilities.
What is the purpose of financial disclosure?
Financial disclosure is important for your lawyer to find relevant documentation when needed. Having a comprehensive set of documents at hand is an imperative tool for your legal representative to attain the best outcome for your case and to understand the financial situation of the other party.
Another purpose of financial disclosure is to reduce the areas of dispute between parties. In disclosing and being aware of each other’s financial position provides for clarity and fewer areas of disagreement.
Do I have to disclose everything?
There is no duty to disclose documents that are irrelevant, “privileged” or documents containing legal advice.
The disclosure of documents can seem an arduous, lengthy and costly process, however it is one of the cornerstones to legal proceedings in family law and failure to undertake the process in a timely or effective manner may prejudice your case and result in higher legal costs.
Hence we advise that if you have any questions or concerns in relation to this duty of disclosure you can contact us at email@example.com or (02) 8014 5885 to discuss the issue and provide you with specific advice.