How to prepare for financial disclosure

‘Financial Disclosure’: two words that strike fear into most people’s hearts. Especially when going through divorce – Form E looks like your worst nightmare. It’s a long form and requires lots of paperwork, it’s true. But fear not. In this post we look at How to prepare for financial disclosure. Remember, financial disclosure doesn’t have to be painful.

What is financial disclosure?

Divorce legally ends a marriage. Financial separation is a different process. To end any financial obligations to each other the divorcing couple must apply for Financial Remedy either by Consent or by order of the court. Without this, the couple’s finances will still be legally entwined, in both life and death.

Financial disclosure is the process of sharing with one another financial information that relates to the marriage and themselves individually. This will inform the Financial Remedy – the subject of next week’s blog.

When do you need to do it?

The court cannot make any financial remedy orders on divorce until the decree nisi has been granted. (This is different if you are applying for Judicial Separation, which is not divorce).

But I recommend you prepare for disclosure long before that. It’s possible, and preferable, to have done your disclosure and reached a settlement with your soon-to-be-ex-husband before the decree nisi is granted – either between yourselves or with the help of a mediator or solicitors. Just make sure you get legal advice before you take the settlement to the courts.

Top tips on how to prepare for financial disclosure

Make sure you DO:

• Start early – as soon as you think you might want divorce you need to get to grips with your numbers
• Get organised – and I’m talking old-fashioned stationery here. Get a folder, some dividers and plastic wallets.  Buy highlighter pens and a pad of paper. Get post it notes.
• Write a list of everything you think you have (assets)
• Write a list of everything you think you owe (liabilities)
• Dig out your pension information (all your pensions)
• Find your mortgage documents or tenancy agreement
• Read my book ‘How to be a Lady Who Leaves: The Ultimate Guide to Getting Divorce Ready’ which has comprehensive details of the financial steps you need to take

Make sure you DON’T:

• Snoop into anything you don’t already have access to
• Leave financial information lying around
• Take copies of information you haven’t been shown before
• Make assumptions – check all your facts and gather evidence. 

What will you need to disclose? 

The exact documents will vary depending on your circumstances but the point is to disclose everything you have and everything you owe. This will give you and the courts a snapshot of your net worth – both as a couple and individually. This will then inform a financial settlement.

Here’s a general guideline to what you will need to share:

• Twelve months’ bank statements of all joint or single current accounts, savings, investments and ISAs
• Twelve months’ credit card statements
• Loan details (including to friends and family)
• Mortgage redemption statement of all mortgages and details of any further charges on properties
• Cash equivalent values for all pensions held
• Details of stock and shares
• Details of any trust funds
• P60
• Three months pay slips
• Two years of accounts for business owners
• Details of assets valued at over £500 (such as vehicles, jewellery, art antiques etc)

If you are likely to receive gifts or inheritances these must also be disclosed (they won’t necessarily be shared). 

I know it’s a big list! Break it down and take it steady to avoid overwhelm. You will be able to find the paperwork you need, just give yourself lots of time.

If you’re a member of The Absolute Academy you can do the ‘Figuring Out Your Finances 5 Day Challenge’ that’s in the portal and free to all members. 

DO NOT enter any negotiations about a financial settlement before you’ve done the numbers! More on this next week…

What happens on disclosure?

When you have all your paperwork together, you will share it with your soon-to-be-ex-husband, and vice versa.  The Family Law Protocol encourages you to do this voluntarily – without applying for court directions. You can do this between yourselves, or with the help of a mediator or your solicitors.

You may disagree with the disclosure you receive. Don’t panic! It’s completely normal that both you and your soon-to-be-ex-husband will have queries about each other’s disclosure. It might be a simple clarification question, or you may have more serious concerns that financial items are missing.

This is why I urge you to write down everything you expect to disclose and everything you expect to be disclosed in advance. This way you can cross-reference more easily without being ‘blinded’ by voluminous amounts of disclosure or the particularly special ‘excel spreadsheet’ that many exes prefer to use over Form E! While we’re on that subject…

…Resist the excel spreadsheet!

In my experience the excel spreadsheet is where many exes try to assert their dominance. You may well have your soon-to-be-ex-husband telling what a ‘fair’ split should look like and making comments such as ‘We don’t need lawyers taking our money. I’ve worked it all out’. A big red flag – beware of letting them take the lead here!

You don’t need lawyers to do Form E (though they can be helpful if you can afford them) so push back and insist that you use the Form E for your statement, and/or work with a mediator to agree a financial statement.

Questioning the disclosure

You can raise your queries about your soon-to-be-ex’s disclosure formally in a questionnaire, and vice versa. You would do this via your solicitors, or can be directed by a court if you’ve issued Financial Remedy proceedings. 

Querying disclosure can alternatively be done informally through mediation, where you have space to challenge or clarify what’s been disclosed.

If you or your spouse refuse to answer any queries within the questionnaire, a court has the power to direct that some or all of the questions need answering (if you are in formal proceedings). 

If you think your soon-to–ex is attempting to hide or dissipate assets, you must seek legal advice immediately. 

What if my soon-to-be-ex doesn’t disclose? 

If your ex refuses to play ball, either via mediation or the solicitor, apply to the court for financial remedy so the court can formally direct it. 

Ignoring the direction of the court is a dangerous game. Your soon-to-be-ex may be subject to a penal notice, and/or the court making inferences about their finances – which may not go in their favour. But it is very much a last resort.

As with all matters in divorce – the smoothest route is the one where you and your soon-to-be-ex can work together as much as possible. This will shorten the time needed to obtain the financial remedy order and mean you can move on with your post-divorce life that much quicker.

If you want help getting through the financial disclosure process, join us in The Absolute Academy! As well as stress-zapping tools and tips, you’ll find a community of motivated, like-minded women, all there to support you and each other as they get their divorce DONE!

The Divorce Alchemist

Emma Heptonstall, the Divorce Alchemist is author of the Amazon best selling book How to be a Lady Who Leaves, the Ultimate Guide to Getting Divorce Ready. A former lawyer, Emma is a practising family mediator and founder of Get Divorce Ready the online self study and group programmes. Emma has been featured on BBC Radio, The Telegraph, the iPaper and in Marie Claire Magazine. To find out more visit www.emmaheptonstall.com