Family Court: why you have to give updated financial documents

Why do I have to give keep giving my former spouse updated financial information?

If you are in court the answer is simple: the Rules say so.

Almost before every step in Court you have to update your financial statement (that will be either a form 13 or a 13.1). There are strict rules on the time limits you have to serve these documents on your former partner and when you have to file them with the court. Just sending them to your former partner or their lawyer is not enough, you must send it to the court as well.

The reason that you need to provide full financial disclosure, even today’s information, is so that you and your spouse have full information. Even if you are not in court, you will be required to provide this information. You likely want a valid separation agreement under the law (the Ontario Family Law Act) if you are not in court so, you need to provide current financial information.

If you have already signed a valid separation agreement based on full financial information and no one is paying the other support (child or spousal), then there is no need to update your financial information after a Separation Agreement is signed. You’re done. The agreement has resolved everything. If you are still paying or receiving support, then you and your former spouse are required under the law to provide your full financial information if there is a change in your financial circumstances.

Providing full information does not mean that your former spouse is entitled to your current assets or property. If you are reviewing a former court order or a separation agreement, it is for reviewing if your income, and ability to earn income from assets is different. From your side, if you get this information from your former partner, it means that you have enough information to get accurate legal advice and have an agreement to change your old agreement, that is valid under the law.

What if I am not married?

In Ontario, common law means you have lived together for three years in a domestic relationship (not room mates) or you have a relationship of some permanence and have a child together.

As a common law couple, there is no automatic right to asset sharing. This means at separation, under the law you only divide jointly owned property or debts. But you still have to give financial disclosure under the Court system. You need to provide a current financial statement (form 13) which lists your current income, assets and debts. You will need to provide bank and pay statements to support the values in your financial statement. You still have to update that form at each step in the court process. It’s all in Rule 13 of the Family Court Rules and in Rule 17.

Your former common law spouse may try and claim an interest in property that is in your name alone. This is called a trust and is a complicated legal argument. There are different types of trusts and they are difficult to prove. This is another reason for full financial disclosure.

A court wants updated information to see if your situation is changing. For example, if you have an income of $50,000 a year, but have a million dollar investment that is not generating a lot of interest, a court will not look kindly on you for not using that money in a wiser way to generate income for you.

What if I am married?

If you are married, you have to provide a sworn financial statement (form 13.1) of your assets and debts for the date of marriage, date of separation and the current date. You will need to share your current income as well. You will need to provide bank and pay statements to support the values in your financial statement. Banks only keep records for 7 years, so depending on what date you married, you might not be able to get date of marriage information.

Although you have to provide current financial information, you do not have to split assets (in law speak “property”) from after separation. Under the law, property for married couples is only split, meaning equalized (see our blog post on explaining that part) for the period of the marriage.

What happens if I don’t provide my current financial information?

If you do not update your current financial information, it can cost you more money. The guiding principle in family law is that you must provide your full financial information. If you delay, the court could order you to pay some of your former spouse’s legal fees.

You could also be at risk of paying more support than you should based on your actual income. If you do not give the court (and your former partner) this information, a Court will assume you earn a certain amount anyway – whether you do or not. A court assumes you are not giving this information because you are hiding something. Whether you are not proud of your situation is not relevant – our advice is always to give the information.

You do not want a court to set an income you do not have. This is called imputing income to you. Not a good plan in Court. Our advice is always follow the Family Court rules. Give all the documents you need to give and keep giving it under the Rules when you need to.

If you need to get support reduced in the future, you could have difficulty if you have failed or refused to provide your information in the past. It will not reflect well on you if you only disclose your income when it goes down and not when it goes up. In short, you’ve got to update your child support when your income goes up and when it goes down. You could be facing some nasty arrears orders otherwise – see our recent blog on that one as well.

The moral of the story: make sure you give the financial documents you need to and when you need to. If you do not have an understanding of the Family Law Rules, spend a short amount of time with us and we can steer you in the right direction. Remember, we are un-bundled legal services, as much or as little help as you want.