When a marriage ends sorting out the finances can feel overwhelming. Before anyone can answer “What am I entitled to?”, there’s a crucial first step: the exchange of full and frank financial disclosure.
Financial disclosure forms the bedrock of any fair divorce settlement. Without complete transparency about what both parties own, owe, and earn, it’s impossible to reach an agreement that is fair. At Slater Heelis, we guide our clients through this essential process with great care, ensuring you understand what’s required and why it matters.
What is full and frank financial disclosure?
Financial disclosure is the legal term for both parties providing complete and honest details (with documentation in support) about their financial circumstances: everything from income and assets to debts and pensions.
In England and Wales, both spouses have an ongoing legal duty to provide full and frank financial disclosure during their divorce. This duty applies whether you’re resolving matters through negotiation, mediation, or court.
The primary document at the beginning of the disclosure process is known as a ‘Form E’. This is a comprehensive 28-page form detailing every aspect of a person’s finances. While completing it may seem daunting, our expert solicitors will help you ensure nothing gets overlooked.
Why does financial disclosure matter?
Full and frank financial disclosure matters because it:
- Ensures fairness for both parties: When you and your ex know exactly what’s in the ‘pot’, you can work towards a settlement that properly reflects your needs and circumstances.
- Helps prevent future disputes: A settlement based on incomplete information can be challenged later if hidden assets emerge. Full disclosure creates a solid foundation that helps to protect against costly legal battles.
- Builds trust in the process: Full disclosure creates an environment where constructive discussions can take place.
- Protects you legally: The family court takes non-disclosure extremely seriously, with consequences including financial penalties, paying your ex-spouse’s legal costs, and even contempt of court charges.
The consequences of non-disclosure
Recent case law demonstrates how seriously courts view financial non-disclosure. In the High Court decision Cummings v Fawn (2023), a husband’s failure to disclose an inheritance of c. £4m led to the court setting aside the entire settlement, meaning the process had to start again.
In the Court of Appeal case of Goddard-Watts (2023), financial orders were overturned because the husband had deliberately not disclosed trust assets. Despite the original award being made in 2010, it was (along with a subsequent award) set aside due to his dishonesty, illustrating that non-disclosure can have repercussions years after matters may initially have seem settled. Lady Justice Macur held, damningly, that the ‘unfortunate delay in finalising the wife’s application has been caused entirely by the husband’s fraud’.
Beyond these landmark cases, the consequences of non-disclosure can include:
- Being ordered to pay your ex-spouse’s legal costs
- Fines and other criminal sanctions, including under the Fraud Act 2006
- Prison sentences for contempt of court in serious cases
- Loss of credibility
- The ability for your ex-spouse to reopen the financial settlement in the future
What needs to be disclosed?
In short, any and all financial resources must be disclosed, along with supporting documentation. More typical resources include:
- Property and real estate
- Bank accounts and savings
- Pensions
- Investments – Including shares, bonds, and digital assets
- Business interests – Including accounts and shareholding information
- Life insurance and endowments
- Personal possessions – Specifically items worth more than £500
- Liabilities
- Income – From all sources
- Inheritances
- Trust interests
Voluntary disclosure and court-ordered disclosure
Voluntary disclosure occurs when both parties agree to exchange information with solicitors or through mediation, outside of the court process. Many couples use Form E to start the process, even outside court proceedings.
Court-ordered disclosure becomes necessary when court proceedings have been issued in respect of financial matters on divorce. Both parties must complete Form E within set timeframes, typically 35 days before the First Appointment hearing. Following this, questionnaires are then raised which will be scrutinised by the court, with irrelevant questions being removed. Each party will then be given a deadline for replying to the other’s questionnaire, and thereafter further deficiencies may be raised if the replies themselves are inadequate and/or lacking in supporting documentation.
It is important to note that whether voluntary or court-ordered, the same ongoing legal duty of full and frank disclosure applies.
The Form E itself concludes with a statement of truth (a statement of truth is also a requirement to any replies to questionnaire), and making a false declaration can have serious legal consequences.
The changing landscape of financial disclosure
Although the Form E contains specific prompts for more commonplace assets, it also requires all financial resources to be disclosed, under certain catch-all sections. So digital assets, NFT portfolios, etc. are all equally as disclosable as the family home.
Self-employment and other situations where a party is able to exert control over the relevant documentation can sometimes add a further layer of complexity.
Nevertheless, the family court takes a robust approach to suspected non-disclosure, and has significant powers in respect of being able to compel third parties to provide evidence. The court can also draw ‘adverse inferences’ where a person’s disclosure does not accord with his or her lifestyle or other known information.
When might you need additional help?
Some situations call for additional expertise: complex business arrangements, suspected hidden assets, international assets, and trust arrangements.
At Slater Heelis, we work alongside trusted independent financial advisers, actuaries, and forensic accountants when needed so that any financial complexities are analysed professionally, allowing further legal action to be taken when required.
Practical steps for preparing your disclosure
- Seek professional advice early
- Start gathering documents early and in an organised way
- Be organised with a clear filing system
- Order pension valuations (known as ‘cash equivalent values’) promptly, and make clear they are required in the context of divorce—they can take weeks, though a quicker timescale applies in the divorce context
- Ensure any documentation relating to overseas assets that is in another language is professionally translated into English
- Update if circumstances change
How Slater Heelis can help
Our expert family law team has extensive experience guiding clients through the financial aspects of divorce, including the disclosure process. We will explain exactly what’s required and ensure the disclosure process is prudently managed. If your spouse’s disclosure raises concerns, we will investigate diligently and involve financial experts where necessary.
If you’re going through a divorce and need guidance on financial disclosure, our dedicated family law solicitors are here to help. Contact Slater Heelis today to discuss your situation in confidence.
Get In Touch
Charlotte Beck is a Partner in the Family Department. She specialises in children and divorce law, financial proceedings, international divorces and high net worth cases.
If you’d like to speak with Charlotte or one of our other experienced family lawyers, please don’t hesitate to contact us by calling 0330 111 3131 or completing our online contact form.
