Financial disclosure is the process where both parties share full details of their finances, including assets, liabilities, future needs, and debts to ensure a fair financial settlement is reached. It is also about being open and honest about your financial situation. But what does financial disclosure entail and what if your husband or wife refuses to engage with the process? Can you refuse financial disclosure and what happens afterwards? In this guide, we look at everything to do with finances and divorce.
Financial disclosure is the process where both parties share full details of their finances, including assets, liabilities, future needs, and debts to ensure a fair financial settlement is reached. It is also about being open and honest about your financial situation. But what does financial disclosure entail and what if your husband or wife refuses to engage with the process? Can you refuse financial disclosure and what happens afterwards? In this guide, we look at everything to do with finances and divorce.
Is financial disclosure needed?
It would be extremely difficult to agree a settlement if you do not know the full financial picture. It is possible that the case outcome can be challenged if it is later found that one of you has not given full and frank disclosure. Financial disclosure is important because it:
- Allows a fair settlement to be agreed
- Prevents disputes or challenges to the settlement
- Is a legal obligation if ordered by the court
- Achieves closure based on facts rather than assumptions
- Helps legal representatives give informed and accurate advice to clients, ensuring they understand their rights and options
What is financial disclosure in divorce?
Financial disclosure in divorce is the process by which both parties exchange full and honest details of their financial circumstances. It typically includes income, savings, pensions, investments, property, debts, and any other financial interests. This process can be done voluntarily, through solicitor negotiations, or formally via court proceedings if an agreement cannot be reached. The standard form used in court cases is Form E, which requires comprehensive financial details and supporting documents such as bank statements, payslips, and property valuations. Even in amicable divorces, financial disclosure ensures that both parties make informed decisions about their financial future.
Here is a list of what you will need to disclosure in a financial disclosure Form E:
- Property values
- Mortgage balances
- Each bank account you have and their balances
- Savings and investments, including shareholdings and any assets held in trust
- Endowment policies
- Personal belongings valued over £500
- Debts and liabilities, including tax
- The value of business assets
- Pension values
- All sources of income
- A budget of your typical monthly expenditure and likely future expenditure
Supporting documentation, such as bank statements, payslips, tax returns, mortgage statements, and property valuations must be provided to verify the financial details disclosed. Once a Form E has been completed, it is exchanged with the other party. You both have an opportunity to examine the forms and documents, ask questions, and request further information or documentation if needed.
Can I refuse financial disclosure?
While it is technically possible to refuse to voluntarily disclosure details of your finances, the court can order you to provide the information anyway, so you are only delaying the inevitable. If you ignore the court order, you can be fined or face tough penalties.
If a party attempts to hide assets, they risk serious consequences, including court sanctions and the possibility of a settlement being reopened. The courts have the power to set aside fraudulent non-disclosure in divorce if later evidence shows dishonesty.
If either party refuses to provide financial disclosure, it is likely to prolong divorce proceedings, which will increase the legal costs on both sides.
What if my husband refuses financial disclosure?
If your husband refuses to provide financial disclosure during divorce proceedings, it can significantly impact the negotiation and settlement process. Full and honest disclosure is a legal requirement, ensuring that financial arrangements, such as asset division and maintenance, are fair.
If financial disclosure is refused in voluntary negotiations or mediation, you may need to take legal action. One option is applying to the court for a Financial Order, which forces both parties to disclose their finances using Form E. If your husband still refuses, the court can compel disclosure by issuing directions orders, requiring him to provide specific documents.
If one party fails to provide financial disclosure, the court can impose penalties, including cost orders, meaning he may have to pay legal fees. In extreme cases, the court may draw adverse inferences, assuming he is hiding assets and making a judgment accordingly. The judge also has the power to impose fines or imprisonment for persistent non-compliance.
If you suspect your husband is deliberately hiding assets, you may request third-party disclosure, where banks or financial institutions provide relevant records. A forensic accountant can also investigate hidden wealth.
Even if your husband refuses to provide the financial disclosure required, the court can still make a financial settlement based on the information available. Seeking legal advice early ensures you protect your rights and secure a fair outcome.
What happens after financial disclosure in divorce?
Once financial disclosure has been completed, the next steps depend on whether the process is voluntary, through mediation, or part of formal court proceedings.
Negotiation and settlement
If both parties have exchanged financial disclosure voluntarily, negotiations can take place either directly, through solicitors, or in mediation. The disclosed information helps ensure that any agreement is based on full financial transparency. If an agreement is reached, solicitors will draft a Consent Order, which is then submitted to the court for approval. Once approved, the order becomes legally binding.
Court proceedings
If no agreement is reached, either party can apply to the court for a financial order. The court will review financial disclosure and arrange a series of hearings:
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First Directions Appointment (FDA): The judge checks whether additional information is needed.
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Financial Dispute Resolution (FDR) hearing: Both sides present their proposals, and the judge gives guidance on potential settlement.
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Final hearing: If no agreement is reached, the judge makes a legally binding decision on how finances should be divided.
Enforcement and consequences
If one party fails to comply with disclosure or refuses to provide honest information, the court can impose penalties or alter the settlement. If financial circumstances change significantly after the divorce, either party may apply to vary the order.
Ultimately, financial disclosure ensures a fair division of assets, giving both parties clarity on their financial future post-divorce.
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The information on this website is to be considered a guide and is therefore not legal advice. You use this information with the understanding that Wiselaw does not accept liability for any direct or indirect losses as a result of anyone relying on or acting upon the information on this website. Whilst we endeavour to provide accurate information, Wiselaw does not accept liability for any errors or omissions on this website.
