Financial disclosure is critical in Family matters. It is necessary for calculating entitlement and amounts for child support and spousal support, property division and for ensuring you have an enforceable separation or cohabitation agreement (also known as a “pre-nup”).

What does the Court Require?

In most claims involving a request for chid support, spousal support or property division, parties are required to fill out a financial statement. The rules of court require that a financial statement be filed within 30 days of commencing the claim or receiving the claim, as well as “promptly” after a material change has rendered the information contained in the financial statement inaccurate or incomplete. Generally, the court is not strict on enforcing this rule but it may hinder your ability to move your claim forward so long as your financial statement remains outstanding.

The financial statement is a court form and includes the following information:

• sources of income
• proof of income for each source of income (such as pay stubs, pension income statement, EI benefit statement and record of employment)
• three most recent income tax returns and a copy of each notice of assessment or reassessment issued to you by Canada Revenue Agency (If you don’t have copies, call the Canada Revenue Agency at 1-800-959-8281 or the tax professional who prepared them for you)
• income summary and specific additions or deductions (information largely obtained from your most recent tax return or expected results if there has been a change in circumstances but also includes things like child support received)
• expenses
• debts
• assets
• any sale of assets in the past two years
• income of other people in the household (only if claiming undue hardship)

What sections apply to which party depends on the specific claims being made and whether a party is claiming that they are unable to afford child support or spousal support as it would cause “undue hardship” (a significant burden to the family).

In Provincial Court, the financial statement is called the Form 4 and can be found at the link here: Provincial Financial Statement – Form 4. Note that in Provincial Court, claims cannot be made for property division or divorce.

In Supreme Court, the financial statement is called the Form F8 and can be found at the link here: Supreme Court Financial Statement – Form F8.

The financial statement is considered an affidavit and if using it in court you must swear or affirm in front of a commissioner for taking affidavits (which includes lawyers and notaries). It is our ethical obligation that our lawyers will not witness your signature on a financial statement without also providing you with legal advice.

What if We ARe Negotiating Outside of Court?

It is important that reasonable financial disclosure takes place before entering into any agreement for several reasons:

1. It is impossible for parties to properly assess their rights and responsibilities if they are negotiating in the dark. It is quite common for one party to have greater knowledge around finances, particularly if there is a family business involved.
2. If an agreement is reached “in the dark” it may later be found by the court to be unenforceable and then everyone is back at square one. Generally it is in everyone’s interest to have finality.
3. Child support belongs to the child(ren) and cannot be waived by a parent. So regardless of what an agreement says, a party could later be found to owe substantial back support if the parties were not accurate in assessing income.

It is recommended to use the court’s financial statements as a guide for what information each party is entitled to but there is no legal requirement that you use a particular form. If negotiations breakdown, you are entitled to these same documents anyway so it will help speed things along if the parties already have them. Typically the information disclosed will be included in the separation agreement to set out what everyone’s understandings are in reaching the agreement. It may also be helpful to attach signed financial statements or documents as an appendix to the separation agreement.

It is strongly recommended before signing any agreement, that you obtain Independent Legal Advice. More information on how we can assist with ILA can be found on our website here: Independent Legal Advice – Separation or Cohabitation Agreements.

WHAT If the Other Party Won’t Disclose Their Finances?

That doesn’t change your obligations to provide proper financial disclosure. If the other party refuses, the court can penalize them and/or impute income to them. “Imputing income” is when the court assigns an income taking into consideration what information you do have, including their age, health, skillset, past income and the industry they work in to assess what a reasonable income would be. The court can also use its discretion to impute income where a party is intentionally underemployed or unemployed.

Cost For FInancial Statement Package

We know a financial statement can be confusing and hard to complete on your own, particularly if you have never done one before and are not familiar with proof of income documents. We are happy to help.

FEES:

This service is meant to be supplemental after you have had an initial consultation. More information about initial consults can be found by visiting our website here: https://rdmlawyers.com/insights/fees/litigation-consults-faq/.

Our standard fee is $600 plus taxes and disbursements. It may be more expensive if you have complex financial arrangements such as partial ownership in multiple companies. In complex cases, our fee will revert to hourly rates.

WHAT THE Fee INCLUDES:

• You will receive a draft financial statement (provincial or supreme depending on whether there is an ongoing court action) along with instructions.
• Our team will assist you in completing a draft and provide guidance on what documents need to be attached.
• Once you have provided the documents, the team will compile everything into the proper format and provide you with a draft to review with a lawyer at a phone, virtual or in-person meeting of up to 30 minutes.
• Any changes necessary will be implemented by our team.
• One additional “signing” meeting of up to 15 minutes. If there is no court action ongoing, we would simply witness your signature rather than swear or affirm it as an affidavit.

This does not include costs for going on record with the court, communicating with the other party or counsel, or providing guidance on child or spousal support obligations which we are pleased to offer as part of a separate package (more info here: https://rdmlawyers.com/insights/family-law/child-support-calculations/) or on an hourly basis.

Please note we cannot guarantee that your lawyer will swear or affirm the financial statement with you as it is our professional obligation to decline where we are concerned a document may contain false or misleading information.

Disbursements:

The standard disbursement (expense) charged is $50. What this includes is the original copy of the signed financial statement as well as an electronic copy.

If you have an ongoing court action, you will then need to make the appropriate number of copies (depends on the number of parties – typically 3 copies plus the original is sufficient), attend the court registry to file the original and have the copies stamped and then serve the other party or parties. We are also able to arrange to complete some or all of these steps at an additional fee. This cost varies based on number of pages, location of the court registry and what service options are available.

Once the financial statement is ready for finalizing, we can prepare a fee estimate and you can decide how you would like to proceed.

TimeLine:

This will largely depend on how quickly you are able to provide us with your first draft, including your proof of income documents. We want to ensure your financial statement fulfils all of the requirements and so will generally wait until you have provided all of the necessary documents before we work on a draft. We will assist you to prepare an incomplete financial statement only if this is in your best interest as there is a court-imposed deadline or hearing upcoming and the documents will not be available in time.

Typically, it takes approximately 2-3 weeks from start to finish so it is important to get started early. If your matter is time-sensitive, we will do our best to work within your timelines but depending on lawyer availability it may result in a rush fee.

NEED To Finalize Your Financial Statement Or TO SCHEDULE A CONSULT?

If you haven’t had a consult yet, please reach out to our Litigation Intake Team at 778.666.3723 or litigationcoldcalls@rdmlawyers.com. We will ask you some basic details regarding the parties involved to complete a conflicts check and determine which member of our Family Law team to schedule you with.

If you have already had consult and your circumstances are largely the same, please advise the Litigation Intake Team accordingly and we will set you up with the same lawyer (if possible) and their assistant to receive a retainer letter and move forward with next steps to complete your financial statement.