A key part of all divorce proceedings is the settlement of the matrimonial finances. The first step towards a financial settlement is usually the exchange of financial disclosure.
Matrimonial financial disclosure involves gathering hundreds of pages of bank statements, property documents and pension valuations, just to name a few. This exercise involves a great deal of work, both for our solicitors, but also our client themselves, leading some to ask, is it really necessary?
In short, the answer is yes; it is absolutely vital in helping to secure a fair financial settlement. Here are three reasons why:
Why you should complete financial disclosure
#1 – The Matrimonial ‘Pot’
It is not possible to accurately assess what is a fair settlement without knowing what assets are in the matrimonial ‘pot’, and the only way to be sure of the extent of your matrimonial assets is for full disclosure to be provided by each spouse. You may think you know what your spouse has, but previously unknown pensions, inheritances, sources of income and property interests are sometimes discovered during the course of disclosure.
Even where the disclosure does not reveal the existence of suspected hidden assets, the peace of mind brought by knowing the true extent of the matrimonial pot is valuable in itself. Moreover, it will not be possible for your solicitor to advise you as to what represents a fair division of the matrimonial assets without seeing full disclosure.
#2 – Valuations
It is not only the existence of assets that disclosure reveals, but also their true value. As part of the exchange of disclosure, valuations of key assets will also be exchanged, typically in respect of the properties, businesses, pensions and any valuable personal effects, such as vehicles or jewellery.
It is not unusual for valuations of such assets to vary significantly from one another, particularly in respect of businesses. Undergoing an informal or incomplete disclosure process risks a financial settlement based on figures that could be inaccurate and prejudicial to your own interests. On the other hand, a full and well considered disclosure process gives the opportunity to test and question valuations provided, to request further valuation evidence and, where necessary, expert reports so that the true value of key assets is known.
#3 – Negotiation
Negotiation of any kind is virtually impossible without trust between the parties and this is never truer than in settling matrimonial financial proceedings.
Where one party does not trust the other’s account of their income or their assets it will be almost impossible to come to an agreement both parties can live with. Disclosure does away with a great deal of mistrust and provides a solid basis on which to make progress towards an agreement, increasing the chance of avoiding expensive and lengthy Court proceedings.
Disclosure can be a daunting part of the divorce process given the time it takes and the amount of information needed, but it is certainly necessary, and almost always of great benefit.
Contact our expert team of family solicitors to arrange an appointment to discuss your options.