Gail Vaz-Oxlade is author of 16 books on finances and best known in her role as host of TV’s Til Debt Do Us Part, Princess and Money Moron.
For most people divorce is less about legalities and more about kids, tax implications and making smart money decisions. Best-selling financial author Gail Vaz-Oxlade brings common sense wisdom to answer your questions about Separation Agreements and divorce in Ontario.
“One of the first questions a reputable lawyer will always ask you is “Where are your financial disclosures and what of your spouse’s disclosures have you seen?” Lawyers ask this because they want to make sure nothing is accidentally missed, that there has not been a misunderstanding of values and to make sure there is no active misrepresentation or non-disclosure. Without reviewing both financial disclosures, a lawyer cannot properly give legal advice on your separation agreement.”
When you separate, preparing your Financial Disclosure ensures that everyone is able to make all-important financial decisions based on real and accurate financial information. Financial Disclosure protects you by ensuring that you have the information needed to make decisions and ensures that both spouses are being transparent and not attempting to hide assets (or debts). Financial disclosure is the process whereby both you and your spouse formally provide supporting documentation regarding all bank accounts, savings, cash on hand, investments, pensions, and any other assets – as well as declare any outstanding debts and liabilities for the present, for the date that you separated and for the day you were married.
Financial disclosure will confirm bank balances, account statements, property values, verify RRSPs, and/or gather necessary information on the value of a privately owned business. A formal pension valuation (as opposed to a pension statement) is required. This means there will be no mistakes; no misunderstandings; no secrets; and both spouses are protected. After you and your spouse finally reach an agreement and before you sign any documents, your financial disclosure should be reviewed by a lawyer to ensure that you are fully satisfied with your knowledge of the family finances.
Every couple faces unique challenges.
Understand how separation will affect you,
your children, your finances and your future.
On May 2nd, 2015, the Family Law Rules in Ontario were updated to include additional requirements for financial disclosure. The law has one simple stipulation: full and complete financial disclosure is required by both spouses. Though the information in the financial disclosure is important – what really matters is that there has been a full and formal financial disclosure.
The Family Law Act allows the Court to “set aside” (meaning ‘not enforce’) any separation agreement that has not included a full financial disclosure. If your separation agreement is not prepared properly from the beginning and is then later “set aside,” you will have cost yourself more time and money in the long run. Financial disclosure is a core piece of the separation puzzle. Yet, for whatever reason, people sometimes have difficulty with the concept of full financial disclosure. Typical objections include:
“Can’t I just take my own homemade Separation Agreement to a Lawyer and get them to sign it?” A lawyer will never just sign off on someone else’s document. They are required to give you legal advice based on the information provided. Lawyers can get into big trouble with the Law Society of Upper Canada if they give advice without reviewing the compete scenario and your full financial disclosures. Without complete financial disclosure, a lawyer cannot give you proper legal advice.”
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