What Is A Domestic Contract?
A domestic contract is a legally binding document that outlines the terms and conditions should one’s relationship break down. Domestic contracts can include a cohabitation agreement, a marriage contract (commonly referred to as a “prenup agreement”), and a separation agreement. Regardless of which type of agreement you’re entering into, there is a requirement and an underlying understanding that all financial information has been presented in its entirety and has also been presented accurately and honestly.
What Is Financial Disclosure?
Financial disclosure refers to the process whereby you and your domestic partner (common law or married spouse) provide one another with all of your financial information and supporting documentation. This includes but is not limited to such information as bank accounts, savings, lines of credit, investments, pensions, credit card debts, car loans or leases, outstanding loans and any other assets or liabilities.
Why Is Financial Disclosure Important?
In Ontario, one is legally required to provide full financial disclosure when entering into any type of domestic contract. There is a list of precedent setting legislation whereby judges have overturned domestic contracts that are not entered into legally; that is, where at least one of the parties involved has failed to properly and fully disclose their financial information.
As a general rule, if you’re wondering if certain financial information is relevant or important to report, it’s always best to assume that it is. When providing financial disclosure, it is always best to check with a family lawyer to ensure that you’re meeting the financial disclosure requirements. You don’t want to be in a position down the road where your agreement is challenged and/or overturned. This can create a lot of unnecessary headaches and hassles and it can cause more financial damage than had you disclosed properly in the first place.
Why Should I Provide My Financial Disclosure?
It is in your best interest to provide financial disclosure and to have your partner do the same. Without a complete picture, many lawyers will not provide you with legal advice or guidance because it would be like asking someone to buy a house before they’ve even seen any pictures. In order to get the best advice from your lawyer, you need to give them the entire picture! Your lawyer needs to know what you own and what you owe. It may seem like a lot of work, but in the end, it will be worth it to know that you have signed the best deal possible.
Why Do I Need My Partner’s Financial Disclosure?
Here too, your lawyer (and you) needs a complete picture of your family’s finances. Without this, it is impossible to negotiate the best settlement for you, moving forward. While it may be tempting to trust your partner and avoid the time associated with preparing your financial statements, this can be quite a costly mistake in the long run. Financial disclosure is an absolute must in order to proceed with your divorce in an ethical and effective manner. Your lawyer won’t be able to provide you with proper advice about your entitlements without proper disclosure from your spouse.
What If The Opposing Party Hasn’t Disclosed Properly?
If you suspect that your spouse or former spouse hasn’t been forthcoming in their financial disclosure, you may have a good case for having your agreement overturned in the event that you can prove this. We strongly recommend that you speak to a lawyer with experience in family law so that you can make an informed decision about how to proceed.
At Hummingbird Lawyers LLP, our family law team has vast experience and success with not only providing legal advice and direction when it comes to drafting and reviewing domestic contracts, but we can help you determine how to proceed if you feel that your agreement was not based on full financial disclosure.
For more information on domestic contracts or financial disclosure requirements, please contact our office. Our team is always available to help.
