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Hello, my name is Anna Troitschanski and I am a lawyer with Feldstein Family Law Group. Today I will be discussing the importance of complete and prompt financial disclosure in family law matters.
When a couple separates in Ontario, one of the aspects that will need to be finalized is the equalization of the spouses’ Net Family Property. Equalization calculations are based on the parties’ respective Net Family Property and are determined by each person completing a Financial Statement. Each spouse needs to swear to the accuracy of their respective Financial Statement.
In order to determine each party’s Net Family Property we look at the person’s assets and liabilities on the date of separation and compare those to the assets and liabilities on the date of marriage. The person with the higher Net Family Property figure will pay his or her spouse an equalization payment of half of the difference between the respective net family properties.
Also when spouses separate, spousal support and child support issues will need to be finalized. The final support figures are based on the spouses’ respective incomes. Determining a person’s income may be as simple as reviewing his or her income tax returns and pay stubs, or it may be more involved and require the services of an accountant or valuator. So, the determination of a person’s true income is of the utmost importance since it is needed for accurate child and spousal support calculations.
The process of determining Net Family Property figures, Equalization payments, and support obligations are heavily based on what is known as financial disclosure. Without documentation to support a person’s income, or statements proving the values of an individual’s assets on the date of separation, it makes it difficult for us, as lawyers, to provide sound advice regarding the amounts to be paid for support or equalization. Obtaining full and frank financial disclosure is meant to ensure that, in finalizing your matter, each party is completely aware of the other person’s financial circumstances as of the date of separation so that they can come to a mutually acceptable agreement.
It is important for couples to remember that providing financial disclosure is a positive obligation on the spouses in a family law matter. Relevant financial disclosure must be provided if it is requested by your spouse or partner.
The first step to resolving any family law matter is for each party to complete a Financial Statement and provide it to his or her spouse or partner along with all of their disclosure pertaining to their income and documentation supporting the figures in their Financial Statement. Now, this step of the process can potentially take quite a long time if either party decides not to provide their full and frank disclosure as soon as possible first, to their own lawyer, and then to their spouse.
More importantly, until full disclosure has been exchanged, final resolutions of support and equalization payments are very difficult to come to.
This step of your Separation Agreement is often frustrating, and at times, it can appear as though the lawyers are dragging the matter out unnecessarily. It is very important to remember that it is our job as lawyers to ensure that proper disclosure has been exchanged and that the spouses’ financial statements have been completed properly so that the negotiations towards a resolution for support or equalization are accurate and fair.
For more information on support and equalization, please visit our website. To speak with someone about your family law matter, please contact us at (905) 581-7222 to book an initial consultation with one of our lawyers. Thanks for watching.