For any divorcing couple, dealing with the financial arrangements can seem overwhelming and complicated. In order to ensure a fair division of a couple’s assets and financial obligations it is necessary for all parties to understand the whole picture. If a divorcing couple are not able to agree on how their finances should be divided, then the courts will be involved and it will be necessary for each party to perform financial disclosure by completing a Form E. This is a financial statement for each party to complete that covers income and assets as well as debts, needs and expenditure of both parties and any relevant children.
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Form E can appear quite daunting since it is a fairly lengthy document, but the reason for this is to ensure that both parties are providing full and frank disclosure. It is also necessary for the parties to give documentary evidence to support their form.
Form E is submitted simultaneously by both parties who can then prepare a list of questions about the other party’s Form E (known as the questionnaire). If the initial disclosure was not complete or the finances are complicated, then the questionnaire can be lengthy.
Once both parties have completed the Form E, there will then be the first court hearing, which is known as a First Directions Hearing. This initial hearing is for the judge to determine if there is any other information that is needed to ensure that a successful settlement agreement can be reached. The parties do not give evidence at this hearing but can be asked to provide further disclosure where necessary.
The details that need to be added to the form include:
• Assets over a certain amount
• Bank accounts and savings accounts
• Life insurance policies
• Mortgages, overdrafts and bank loans
• Credit and store card debts
• Hire purchase agreements
• Capital Gains Tax that would be owed on any assets
• Any business assets and directorships
• Needs of the party and any children
• Schedule of costs including legal fees to date
The parties also need to list on the form any other relevant information including personal information such as any disabilities, as well as information on the relationship such as contributions that they wish the court to take into account, relevant conduct in certain circumstances and the standard of living enjoyed during the relationship. Each party also needs to provide a detailed chronology on any relevant dates.
Completion of a Form E is only compulsory where the financial issues are being dealt with by the courts. If the parties are able to agree on their finances between themselves then it is not compulsory for the parties to complete this form, but it can be very useful to use them in these situations to make sure that a fair agreement is reached in full knowledge of the facts.
The system relies on both parties being honest and supplying all relevant information. Some typical issues that can arise include:
Form E can seem time-consuming, but it is a legal requirement and must be completed where the courts are involved. Refusal by either party to complete a Form E can have some very serious implications from a costs order being made against them to imprisonment for repeated refusals. Where the parties are trying to resolve a financial agreement between themselves, then one party can refuse to complete the Form E if the other party suggests using it. However, it is worth bearing in mind that this could lead to the other party applying for a financial remedy through the courts and will generally result in a compulsory Form E being requested by the court.
If a party is not honest on the Form E, then it is possible for various actions to be taken to ensure that full and frank disclosure is obtained. This can range from a freezing order or injunction to prevent one of the parties from disposing or transferring assets to searching for hidden assets. It is also possible to appoint a forensic accountant to obtain a more accurate picture of the other party’s financial situation.
If the reason for partial disclosure is that a party is trying to hide their true financial situation, then again there are methods to ensure complete disclosure is given. However, even an innocent partial or incomplete disclosure can be costly and result in delays.
It is really important that all documentary evidence provided to support the Form E is current, since again this is necessary for full and frank disclosure. This includes ensuring any valuations of assets are recent to ensure there is a realistic overview. If this is not done, then it is more likely that the other side’s questionnaire will be lengthy and further investigations may be requested, which again is time consuming and costly.
The information on this website is intended as a guide and does not constitute legal advice. Vardags do not accept liability for any errors in the information on this website, nor any losses stemming from reliance upon the statements made herein. All articles and pages aim to reflect the legal position at time they were published, and may have been rendered obsolete by subsequent developments in the law. Should you require specialist advice, tailored to your situation, please see how Vardags can help you.