One of the first procedural steps that occur in any family law matter is full and frank disclosure of the parties financial circumstances so the parties can determine the assets and liabilities of the property pool available for distribution. You would not be alone if you felt this was personal information that should not be shared, however it is mandatory under both the Family Law Rules 2004 and the Federal Circuit Court Rules 2001.
Generally there will be a list of requests for documents along the lines of:
(a) Tax returns and assessments;
(b) Bank account statements;
(c) Employment contracts/payslips;
(d) Superannuation statement;
(e) Real estate valuations or market appraisals for any property;
(f) Statements for any share portfolios;
(g) Valuations of any business and/or company you hold an interest in;
(h) For any trust in which you hold an interest in and to, a copy of the trust deed;
(i) Profit and loss statements, financial statements and any and all other financial records for any interest you may have in a business and/or company; and
(j) Any other financial information in your possession and/or control relevant to the financial matters.
Once collated and the values are added together, this information helps determine the total net property pool. This means, once a percentage split is determined, the percentage is applied to the total pool to work out what each party will be left with.
However, how important is it to respect the other party’s privacy, after separation? Need I disclose every single dollar I have spent? The law says that a failure to make full and frank disclosure could result in penalties and is also unfair because the total pool is not properly reflected – this means one party could end up with less or more than they are entitled to. Not only this, but ensuring both parties are informed of the other’s financial circumstances makes the separation as amicable and cooperative as possible.
Parties may find the process frustrating – like their privacy is being overridden – but it is important to remember that disclosing the abovementioned documents is only going to speed up the settlement process and ensure it is as low-stress as possible. Compare this to hiding certain documents or bank accounts, and them being found out about later – this is going to add stress, time and costs to your property settlement proceedings.
Similarly, the quicker documents are disclosed and things are out in the open, the quicker the parties are able to go their separate ways, where their privacy can be fully maintained. Think of the duty of disclosure as ‘ripping the band-aid off’ – it’s essentially unavoidable and is only going to make the situation easier in the long run.
If you have any questions, you can book your free initial consultation here.