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Is it normal to exchange financial disclosure to reach a financial settlement in divorce?
Trying to agree a financial settlement during a divorce can be an intimidating and daunting prospect. In order to ensure a fair and reasonable settlement, we always advise clients of the need to exchange full and frank financial disclosure, whether in Mediation, voluntarily or in Court proceedings where it is a legal requirement. At Johnson Astills we are often asked whether this is really necessary, the simple answer is yes.
It is important to know from the outset what might fall within the “matrimonial pot” and what might fall outside of the matrimonial pot as the approach a court may take to the two may be different. Financial disclosure, once exchanged, will allow informed decisions to be taken and advise to be given to clients on their financial claims arising from marriage.
During court proceedings parties are required to exchange and disclose financial information in a document called a Form E. This is a 28 page document that looks complicated, however once you start filling it out, especially with the assistance of a lawyer, it is simpler than you think. Often Lawyers will suggest using this Form to voluntarily exchange disclosure so it’s not just confined to court proceedings. The information required by the Form E provides a sound basis upon which negotiations can begin and gives a comprehensive and clear picture of each parties financial position.
The Form E will ask for figures and evidence in respect of the following:
- Family background such as children and dependents
- Property with evidence of outstanding mortgage and valuation of each property
- Bank accounts/savings 12 months statements required for all
- Investments (Shares/ISAs) with evidence of the current value
- Life Insurance Policies with evidence of the current value (even if nil)
- Assets such as cars, jewellery etc
- Liabilities (loans/credit cards) whilst evidence is not required, having this to hand is helpful
- Pensions evidence of a Cash Equivalent Transfer
- Income whether employed or self-employed or any other source with evidence to support
- Employment with evidence such as payslips for the last 3 months and P60
- Business assets and interests with evidence on company accounts, tax returns etc
- Outgoings such as bills, hobbies
Quite helpfully, the Form E also provides space for other relevant information to be provided, for example any change in circumstances that are relevant, what you need and want from a settlement and whether there is anything relevant that you believe should be taken into consideration when discussing a settlement.
All in all the Form E document is an opportunity for each you both to set out your financial circumstances, needs and requirements , current and future This will then allow you and your Lawyers to determine what is available and what might be considered a fair and reasonable division / settlement. It is important that this document is completed truthfully and thoroughly by everyone and failure to so can delay a settlement being reached, incur costs and cause all manner of problems .
Once Form E’s have been exchanged the assets in the “matrimonial pot” will be clearer and everyone will be able to consider a settlement. If it is the case that you still require more information or clarification before considering a settlement then Questions can be raised. It is important that everyone is happy with the financial information exchanged and feels that there are no undisclosed or hidden assets which might otherwise preclude a settlement being reached.
If you need any assistance or advice in respect of reaching a financial settlement, then our Family Team at Johnson Astills would be happy to help. We have specialists for finance in divorce that would be happy to guide you through the process and advise you what is best for you. If you would like to book an appointment with one of our Family Team, then please call Johnson Astills on 0116 255 4855 and a member of our team would be happy to take your call.