Financial disclosure in divorce cases

The ongoing divorce case of Young versus Young highlights the necessity for all parties in matrimonial proceedings to provide full and frank disclosure of their financial circumstances.

Mr Scott Young, a property dealer, was ordered by the court to serve a six month prison term for failing to provide details of his finances and for failing to adequately explain the disappearance of his wealth during his divorce proceedings. He had repeatedly failed to provide information and documentation that was required and he was found to be in contempt of court.

The judge said that a prison sentence was ordered as a fine or suspended sentence would not be a sufficient penalty in this case.

In all divorce cases in which the courts are required to resolve financial matters, both parties must provide details of their financial circumstances. This is done by completing a ‘Financial Statement’ for the court.

The court also requires the parties to provide documentation to support what they say in relation to their finances. The documentation and information which is required includes:-

• Bank or building society statements for the last 12 months in respect of all accounts held
• 3 months’ payslips and most recent P60
• Pension statements, including confirmation of the current value of each pension held
• Recent mortgage statements in respect of all properties owned
• Documentation in respect of all ISAs, bonds, shares, endowment policies and other investments held
• Business accounts
• Details of monthly outgoings

Once the Financial Statement is completed both parties’ solicitors are able to raise questions regarding the documentation provided. They will ask for clarification if any of the information is unclear or if they believe something has been omitted.

The court will then order the parties to reply to these questions and, if they fail to do so, they could be found to be in contempt and could face a prison sentence.

It is therefore vital that all parties in divorce cases are aware of the need to produce this information and to provide a full account of their financial circumstances to the court.

If you would like to discuss this or any other family law matter, please contact Janine Hutson on 01772 258321, or at janine.hutson@harrison-drury.com