Having full financial disclosure is the baseline for negotiation of most domestic contracts. Financial issues that could pertain to support, property and succession are contained within them. All too often, a client provides counsel with a draft separation agreement, provided by the opposing side, that lacks full financial disclosure, expecting that turnaround can be achieved
In our profession, we often meet people after they’ve made a life-changing decision. Often, the individual does not realize the legal implications of their actions. In this blog, I will discuss the ‘what ifs’ and provide an outline of the ‘rules’ that go along with major life decisions.
1) If my child(ren) live 50/50 with each parent, there is no obligation to pay support
This may be true but is likely not. If child(ren) spend more than 40% of their time at each parent’s home, this is referred to as shared parenting. In these circumstances child support can be different than the child support guidelines. The first step in determining child support obligations in a shared parenting arrangement is to determine each parent’s income for support purposes and determine their child support obligation in accordance with the Child Support Guidelines.
The second step is to determine the ‘set-off’ amount of child support. This is determined by deducting the lower support payment from the higher payment. For example:
I’m surprised at the number of married clients who tell me they either haven’t been involved in the family finances, or they don’t know what their spouse owns. In many of these cases, their partner was secretive, or dismissive or evasive when faced with questions about the family, the business or their own finances.
Money problems are at the root of many separations I’ve seen. Even if it wasn’t the primary cause, conflict over money often plays an essential role in arguments and builds the level of distrust, leading a couple to decide to separate. So, it’s no surprise when money struggles plague the separation process.
What is Financial Disclosure?
Are contemplating a separation or divorce? One of the most important procedural steps you can anticipate is the exchange of full and frank financial disclosure. Family law legislation requires both parties to have sworn financial statements including supporting documentation. The forms needed for this process depend on whether the resolution of issues includes both property and support considerations, or just support.