Financial disclosure - what it is and how we can help

Financial disclosure is the process by which you each set out your financial circumstances. This includes naming, describing and providing values for: income, property, savings and investments, pensions, debts and any business interests. Often the process requires you to support the information with documents, such as bank statements, market appraisals, accountant letters and payslips. You each provide the information that pertains to you, and you each then receive the information that pertains to the other. The intention is that you are both then on a level playing field, and you are both aware of the full financial picture.

Advice is only as good as the information it is based on. Without a full picture, neither of you can know whether a proposed settlement is fair. Similarly, solicitors won't be able to advise on an appropriate settlement, and a judge will have difficulty in deciding how assets should be divided. In simple terms, how can a settlement be considered without knowing what is available?

It is particularly important because an agreement reached on incomplete or misleading information can be reopened later, sometimes years afterwards. Proper disclosure now helps to limit any potential claims to reconsider the settlement in the future.

There is no single required format outside court proceedings, and the level of disclosure should be proportionate to your specific circumstances.

Form E is the court's standard financial statement and is therefore mandated in court proceedings. As a result, many couples choose to use it voluntarily, whether in mediation or solicitor negotiations. The Form E is thorough and something with which solicitors and mediators are familiar. It tends to be more suitable in circumstances where the finances have some complexity, or when there are concerns over one of you not providing transparency as to the financial position.

For more straightforward circumstances, other options can be agreed. One such example might be for you both simply to list your assets and values in a spreadsheet (an asset schedule), with each of you then able to raise any questions or request any documentation should they feel it necessary to do so. This approach tends to be more appropriate when the finances are more straightforward, and you have both been broadly aware of the other's financial position throughout the marriage.

Form E and its guidance notes are published on gov.uk, and we can help you decide which format fits your circumstances.

Some parts of disclosure can be more challenging than others. We have addressed below those areas where people commonly ask questions.

Pensions. Every pension needs to be disclosed, including small, old or frozen pots you have not paid into for years. Each provider needs to be asked for a cash equivalent value, which can take several weeks to arrive, so it is worth requesting these early. For some types of scheme, that figure can understate what the pension is really worth, and sometimes a pension expert will need to be instructed to determine how a pension should be divided.

Bank accounts. The expectation is usually twelve months of statements for every account, including dormant accounts and app-based ones. A forgotten account can raise suspicion, even when it is entirely innocent, so it is worth taking the time to list everything at the start.

The income needs section. As well as what you have, disclosure covers what you need: a realistic monthly budget. It can be very difficult to itemise your future monthly outgoings in this level of detail, but this section can play an important part in considering whether there are any spousal maintenance claims. Needs are one of the central considerations in reaching an appropriate outcome, so it deserves the same care as the figures for the assets.

Business interests. If either of you has an interest in a business, that value is rarely obvious from the accounts alone, and how income is drawn from the business can be as important as what it is worth on paper. This can be a hotly disputed area and one that elicits strong emotions, so it is important to get advice early. Often, it can be helpful to introduce your accountant to your solicitor at an early stage so that everyone involved is clear on what is required.

Personal belongings. House contents and cars are disclosed at their second-hand value, not what they cost or what they are insured for. Most contents are worth far less than people expect, and overvaluing them tends to create friction without changing the outcome.

Disclosure does not have to be something you face alone, and the help we provide can be proportionate to what you actually need - we are flexible in the way we work to best suit your requirements. This means we can complete your disclosure on your behalf; we can review what you have prepared before it is exchanged, to check it is accurate and complete; we can review the other person's disclosure, to check whether anything is missing or looks unusual; and we can review both side by side and give you initial advice on a reasonable settlement, so you know where you stand before deciding your next step.