Why Does Financial Disclosure Need to Occur?
Financial disclosure needs to happen as:
- Without knowing this information, one party may agree to an outcome, which results in them receiving less than their entitlement;
- Sometimes parties are mistaken as to how assets are owned, which could result in a joint asset remaining in joint names. This could affect the parties down the track. For example, if there is a joint loan that remains in joint names and one party then fails to make payments, the bank will pursue both parties;
- Sometimes parties are mistaken as to what assets or liabilities exist, or their values until they read the statements ‘in black and white;’
- Court orders and consent orders can only be set aside in limited circumstances. One such circumstance is if there is a ‘miscarriage of justice by suppression of evidence’. This includes a failure to disclose relevant information. So, if full financial disclosure is not provided, there is a risk of orders being set aside later. This could happen years down the track and by that time, the parties would have moved on with their lives, including in a financial sense, and may then have to restart the property settlement process again.
For these reasons and many more, it is beneficial to both parties to ensure they provide the other with full financial disclosure in order to resolve their property settlement.