You cannot make good financial decisions during divorce unless both you and your former partner understand the complete financial picture. Full financial disclosure builds trust, helps you make informed decisions, and can keep negotiations moving efficiently. Trying to hide assets, income, or debts usually creates more conflict, higher legal costs, and bigger problems later.
Money is one of the biggest sources of fear during divorce.
You may wonder whether you can afford to keep your house. You may worry about retirement. You may have questions about your spouse’s income, investments, debts, or business interests. You may simply be wondering, “Am I going to be okay?”
You cannot answer those questions without good information.
That is why financial transparency is so important during divorce.
You Need the Whole Financial Picture
Before you can make reasonable decisions about property, support, or your future, you need to know what you actually have.
That usually means gathering information about:
- Income
- Bank accounts
- Investments
- Pensions and retirement savings
- Real estate
- Business interests
- Mortgages
- Credit cards and lines of credit
- Other assets and debts
You also need historical information in some situations, particularly when determining what each of you brought into the relationship.
This process may feel intrusive. But the goal is not to invade each other’s privacy. The goal is to make sure both of you are making decisions using the same set of facts.
Hiding Information Creates Fear
Divorce already involves a tremendous amount of uncertainty. When financial information is missing, that uncertainty becomes fear.
You may start wondering, “What else don’t I know?”
Once that happens, trust disappears very quickly.
If your former partner believes you are hiding money, they may ask their lawyer to investigate further. That can lead to additional document requests, correspondence between lawyers, accountants, valuations, and potentially court applications. Indeed, if an asset is not disclosed during the divorce and is later discovered, not only can your former spouse go after that asset, but often settlement agreements provide that you are obligated to pay their lawyer’s fees for doing so.
Suddenly, something that might have been straightforward becomes expensive and adversarial.
Full disclosure at the beginning can prevent many of those problems.
Transparency Does Not Mean You Have to Agree
Providing financial information does not mean you are agreeing about how everything should be divided.
Those are two separate questions.
First, you determine what exists.
Then you discuss what should happen to it.
You may completely disagree about who should keep the house or how a particular asset should be handled. That’s okay. At least you’re negotiating from accurate information.
You cannot have a productive discussion about dividing a pie when nobody knows how big the pie actually is.
Financial Transparency Is Essential in Mediation and Collaborative Divorce
Transparency becomes especially important when you choose Mediation or Collaborative Divorce.
Those processes depend on informed decision-making. You are trying to create an agreement that both of you can confidently say yes to.
Sometimes a Financial Neutral can help with complex financial assets in order to give both parties a clearer picture of the family’s finances. Instead of each of you hiring competing experts, you can work from shared financial information and focus your energy on finding solutions.
That can be particularly valuable when you have businesses or complicated retirement plans.
Be Honest With Your Lawyer Too
Financial transparency also means being completely honest with your own lawyer.
If you have debt your spouse doesn’t know about, unusual spending, undisclosed income, or another financial concern, tell your lawyer.
Your lawyer cannot help you deal with something they don’t know exists.
It is always better to address an uncomfortable issue early than to have everyone discover it later.
Ultimately, transparency gives you something incredibly valuable during divorce: clarity.
Once you know what you have, what you owe, and what your realistic options are, you can stop guessing and start planning your future.
FAQs
The exact requirements depend on your circumstances, but you generally need information about income, property, investments, pensions, bank accounts, businesses, and debts.
Tell your lawyer. There are often legal and financial tools available to investigate missing information and require proper disclosure when necessary.
No. Disclosure establishes the financial facts. How assets and debts should ultimately be divided is a separate legal and negotiation question.
Early in her legal practice, influenced by her late uncle who was a Justice of the Court of Queen’s Bench, Marla Miller, K.C. became a Family Law Mediator. She has been helping families through mediation for over 30 years. In 2001 she, along with Pierre Boileau, K.C. and others, was one of the founding members of the Association of Collaborative Professionals (Edmonton). She has been an active volunteer with that Association ever since.
One of the first Family and Divorce Lawyers in Edmonton to make a commitment to give up litigation as an option, Marla remains passionate about helping her clients settle outside of court by finding agreements that meet their needs and interests. As both a Registered Collaborative Family Lawyer and a Registered Family Mediator, Marla is one of the most experienced family Mediators in Edmonton.