Financial Disclosure in Family Law

In family law, a lot rides on disclosure of financial information. To properly determine child support, spousal support, and division of matrimonial property it is imperative that accurate information about income, assets, and liabilities of both parties are shared. Without this information being shared, it is very difficult to make any headway in resolving matters.

 
When complete and accurate disclosure is not provided, the matter can get bogged down. Costs go up unnecessarily, emotions are enflamed, and resolution becomes nearly impossible.
 
DUTY TO DISCLOSE
As if there was not already reason enough to disclose, there is a statutory obligation to provide disclosure.
 
For instance, sections 21-25 of the Federal Child Support Guidelines provide statutory authority with respect to the obligation to provide disclosure to determine child support.
Section 21 indicates that the following disclosure is required to determine child support:
(a) a copy of every personal income tax return filed by the spouse for each of the three most recent taxation years;
(b) a copy of every notice of assessment and reassessment issued to the spouse for each of the three most recent taxation years;
(c) where the spouse is an employee, the most recent statement of earnings indicating the total earnings paid in the year to date, including overtime or, where such a statement is not provided by the employer, a letter from the spouse’s employer setting out that information including the spouse’s rate of annual salary or remuneration;
(d) where the spouse is self-employed, for the three most recent taxation years
(i) the financial statements of the spouse’s business or professional practice, other than a partnership, and
(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm’s length;
(e) where the spouse is a partner in a partnership, confirmation of the spouse’s income and draw from, and capital in, the partnership for its three most recent taxation years;
(f) where the spouse controls a corporation, for its three most recent taxation years
(i) the financial statements of the corporation and its subsidiaries, and
(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arm’s length;
(g) where the spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recent financial statements; and
(h) in addition to any income information that must be included under paragraphs (c) to (g), where the spouse receives income from employment insurance, social assistance, a pension, workers compensation, disability payments or any other source, the most recent statement of income indicating the total amount of income from the applicable source during the current year, or if such a statement is not provided, a letter from the appropriate authority stating the required information.
 
Similar disclosure requirements are also echoed in the Alberta Family Law Act, and section 31 of the Alberta Matrimonial Property Act requires each party to a matrimonial dispute to provide the other party with a sworn statement showing their income, assets and liabilities.
 
NOTICE TO DISCLOSE/APPLICATION
In an ideal world everyone would voluntarily exchange financial disclosure. However, this not always the case. When disclosure is not voluntarily provided, there is recourse in filing a Notice to Disclose/Application with the Court. This is an application wherein the responding party is required to provide specified financial disclosure within 1 month. The required disclosure is a comprehensive list of statements showing components of income, assets and liabilities.
 
IF ADDITIONAL INFORMATION IS REQUIRED
Additional disclosure information, beyond what is covered by the Notice to Disclose, may be sought by application to the Court or via Questioning. Questioning is a formal process investigation wherein a party may be questioned under oath. During this process, the party being questioned may be asked to provide undertakings. This means that they may be asked to provide additional or clarifying documentation.
 
The guiding principal in what may be disclosed is whether the material is relevant and material. The Court will assess any request for disclosure on this basis.

Michael Dugas

Michael Dugas is an associate with Rowanoak Law Office who practices Family Law.