Honesty in Financial Statements

It's not uncommon for some parties to be dishonest with respect to the information provided in their Financial Statement, but in this video we will explain why being truthful is critical.

Hello, my name is Daphna Schwartz and I am an associate at the Feldstein Family Law Group. Today, I will be discussing the importance of being truthful in your Financial Statement.

It is not uncommon for some parties to be dishonest with respect to the information provided in their Financial Statement. A party may try to reduce their income on their Financial Statement in order to mitigate their support obligations. This may be more common amongst self-employed parties.

Parties involved in family law proceedings are obligated to act towards each another in good faith and that includes swearing true and accurate Financial Statements.

Providing a fraudulent Financial Statement may cause a Separation Agreement or a Court Order that has been based on your Financial Statement to be set aside. In addition, the other party is likely to reference your dishonesty at every step in the case and you may be consistently attacked for lack of credibility. Failure to be honest may also cause a judge to believe that you are trying to avoid a truthful inquiry of your financial situation.

Pursuant to the Family Law Rules, a Financial Statement must also be updated even after it has been sworn and filed. If there has been a change in your Financial Statement or you discover that information in your Financial Statement is incorrect or incomplete, you must either file the correct information or file a new Financial Statement with the correct information, together with any substantiating documents. If changes are minor, you may instead serve and file an affidavit detailing the changes. If the change is something that can be easily proven with supporting documentation, corroborating papers should be provided to the other party as well.

If you discover an undisclosed asset of insignificant value after your financial disclosure has already been provided, or you realize you forgot to disclose a source of income or a debt, the impact may be minimal. If however, the other party discovers the non-disclosure first, there may be serious consequences. Even if the non-disclosure was inadvertent, the non-disclosure may have consequences.

If you are unsure as to what your income is, you should clearly specify that in your Financial Statement and retain an income valuator to establish your actual income rather than guessing or providing an incorrect estimate. It is important to be as accurate and truthful as possible.

Lawyers have a duty to ensure that all information their client provides to the court is accurate. In order to do this, we must ensure that we have the correct information from our clients. If your lawyer discovers that you are either intentionally or unintentionally omitting information from your Financial Statement, your lawyer must try to prevent this from continuing. If you do not agree to alter your Financial Statement to make it truthful, your lawyer must withdraw from representing you or seek leave to do so.

For more information regarding Financial Statements and the importance of filling them out correctly, please contact us at (905) 581-7222 for a consultation. Thank you for watching.

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