Written by: Taylor Wilson, Family Lawyer
Family law proceedings often involve complex financial matters, including the division of assets, determination of support obligations, and assessment of financial contributions. To ensure a just and equitable resolution, financial disclosure plays a pivotal role in these cases.
What is financial disclosure?
Financial disclosure is the process whereby parties must provide ‘full and frank’ disclosure of their financial position to the other party. This includes disclosure of income from all sources, assets and liabilities, as well as any other financial resources. Examples include:
- Gifts or Inheritances
- Centrelink benefits
- Businesses, partnerships or joint ventures
- Bank accounts
- HECS debts
- Credit cards
- Mortgages or personal loans
- Tax Debts
- Any other account or entity in which you hold a beneficial interest
The obligation of full and frank disclosure remains ongoing throughout the matter and applies whether you are reaching an agreement by consent, or if the court is making property orders for you. Parties are also required to disclose if property has been disposed of post-separation.
Why do I need to disclose my financial position?
While disclosing all of your assets and liabilities can feel like an invasive exercise, it is a fundamental step in family law proceedings. The basis of this disclosure obligation stems from the court’s power to make orders that are considered to be ‘just and equitable’. In order to do so, there must be a clear picture of what the assets are, so that a just and equitable distribution can be achieved.
The financial disclosure process also forms part of the court’s ‘pre-action procedures’. This is because the disclosure process can narrow the issues that require the court’s intervention, ultimately saving the parties’ time and costs.
Beyond just being a legal requirement, financial disclosure establishes the status of the property pool.
What is the Property Pool?
The pool becomes the foundation on which negotiations occur and outcomes can be achieved, resulting in the parties in avoiding contested court proceedings. Establishing the pool on evidence achieved through financial disclosure can also assist in managing the expectations of the parties’ entitlements to the property pool. Compliance with disclosure obligations also insulates the agreement or orders reached from being set aside later on.
Equally, the disclosure obligation also extends to parenting matters for information relevant to the children including medical or school reports.
What if I fail to comply with my financial disclosure obligations?
A failure to disclose may result in the court exercising its discretion to impose a penalty against you. This could include a fine or imprisonment, or making a costs order against you. Additionally, any prior agreements or orders that were made based on incomplete or inaccurate information may be set aside if it is determined that one or both of the parties have failed to comply with their disclosure obligations. This would ultimately trigger the process to start again.
Our experienced Family Law team can provide assistance to you through the process of dividing your assets, and advise you on the peripheral issues you may not have considered when separating.
The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.