The Importance of Financial Statements in Family Law Proceedings

• by Carly Mellon

The Importance of Financial Statements in Family Law Proceedings

During family law disputes, although preparing financial statements can be daunting, they are important to helping resolve complex financial disagreements between ex-partners. Depending on what is involved in your family law dispute, the preparation, serving, and filing of a financial statement may be required. The following will outline some important information to consider when preparing financial statements for your family law proceeding.

Must I Prepare a Financial Statement?

Rule 13 in Ontario’s Family Law Rules[1] provides the circumstances where parties must provide financial statements. Financial statements must be prepared if the matter involves claims for child or spousal support, or claims related to property or debt disputes. However, if the matter does not involve spousal support nor property issues and you are only making a claim for child support under the Table amount, you are not required to provide a financial statement. Also, you do not have to file a financial statement if you and the opposing party consent to file a motion to change child or spousal support, if you both agree that financial statements are unnecessary. Finally, you will not have to file financial statements if your claims relate to family arbitration only.

Once you identify whether you are required to file a financial statement based on the nature of your matter, it is important to know which forms are needed. If your matter only involves motions for support, either child or spousal, and your claim does not include property issues, you need to fill out Form 13. This form requests the values of your income, expenses, assets, and debts on the date in which you fill out the form. Further, even if your claim involves demands for support, if your claim involves a dispute over property, regarding family assets or debts, then you must provide Form 13.1 instead.

Why are Financial Statements Important?

With any financial dispute, timely and accurate disclosure is crucial to reaching a fair and appropriate resolution. In fact, the Family Law Rules specifically requires parties to provide honest and correct amounts. If parties fabricate financials or delay production of these documents, the ultimate resolution of the dispute may be delayed and cost unnecessarily more. If you believe that your ex-partner is withholding information or their statements do not accurately reflect their financial position, you can request that they provide additional information. If they do not provide this information after 7 days, you may bring a motion for an order for disclosure.

Full and open financial disclosure is so crucial to the proper adjudication of family law disputes that the Rules require parties maintain an ongoing obligation to update their financial statements. Specifically, before a case conference, motion, settlement conference, or trial, if the information originally provided is older than 30 days, parties will be required to provide updates.

Tips to Get Started

To better prepare you for the filling out of Form 13 or Form 13.1, the following is a list of information you will need to have handy. To prove your income, you will need to have the last three years of Income Tax Returns and Notice of Assessments, as well as other tax documents if they apply to you. You may be required to provide pay stubs as well. Other information and documents you need to provide include bank account information, including chequing and savings accounts, credit card and line of credit statements, as well as RRSP statements. You will also have to disclose whether you rent or have a mortgage and the amounts associated with your housing and matrimonial home. In addition, you will have to disclose the land you own, if any, as well as any vehicles, jewelry, and furniture.

As mentioned above, it is important to be as accurate as possible as a failure to be open and frank regarding your finances may result in adverse inferences about your credibility, which can have negative consequences on your matter. It is important to note that even though producing financial statements are necessary in some circumstances, the importance behind them is not only the statements themselves, but the story it tells about your finances.

  1. Family Law Rules, Rule 13.