Financial Disclosure - Family Mediation
Note: Prior to attending a mediation session, we ask parties to complete our online financial worksheet.
We are often asked, “What financial information should I share and bring to my mediation session?”
Resolving family law matters outside of court is often far quicker, more cost effective, and results in far higher satisfaction than an imposed outcome. However, you do need to be aware of some requirements when it comes to financial disclosure.
What should I bring to the mediation session, and what should I request?
To ensure an enforceable agreement, all significant assets and liabilities should be shared prior to a separation agreement being reached. This is often referred to as ‘financial disclosure’.
As discussed in the intake meetings with each party, the Family Law Act requires that full and true financial disclosure is provided to the other party. A “Schedule A” containing a list of assets and liabilities is included at the end of the agreement.
To save some time in the session, this can be prepared and brought to the mediation as an Word or Excel spreadsheet / list of all disclosed and agreed assets and liabilities (in either or joint names) as of the current date. You should also bring the supporting documents to confirm the values given. If you unaware of certain financial assets, you can request details from the other party.
Some examples of the information you should bring to the session, and you may request from the other party:
- real estate personally held and value – including address and registered ownership
- all bank accounts, including balances, and the last 4 digits of each account number
- investments (RSPs, GICs, TFSAs, shares , crypto, etc.)
- any pensions (full details)
- vehicles (make / model / year / odometer)
- any held company details including precise legal name of the company, share structure and value of each company, including business financial statements
- any other significant assets.
And any liabilities including:
- credit cards
- HELOC and LOC details and account numbers (last 4 digits).
- any other liabilities
In some circumstances, if there is no agreement as to values, appraisals may be required prior to the mediation session to confirm real estate values, company or pension values. As previously discussed, we can assist with providing details of specialists in this regard if required.
Please note that as mediators, we are not able to order parties to provide financial disclosure or provide legal advice about disclosure. We advise parties to seek legal advice if the financial situation is unclear, there is risk of fraud or a risk that some assets have been hidden, or if sufficient disclosure has not been provided upon request. It is for parties to decide, with legal advice if required, whether or not sufficient financial disclosure has been provided by the other party.
Please complete this financial worksheet prior to your mediation session:
Why is Financial Disclosure Important?
In short, before we can divide what is “on the table” following a separation, we need to know what is actually “on the table” to divide.
The courts typically insist on full and true disclosure for enforceability purposes, and banks may query the validity of agreements reached that do not contain an agreed list of assets and liabilities. Assets that are not correctly disclosed in the agreement are typically also not protected by the agreement. As a result, we typically spend the first 30 – 90 minutes in the mediation session discussing the list of assets and liabilities, even in cases where there is general agreement on a division of assets. However, as mediators we cannot make orders regarding disclosure and do not take on the responsibility to ensure that disclosure and the list of assets and liabilities constructed during mediation is true and complete. It is for parties to decide, with legal advice if required, whether or not sufficient financial disclosure has been provided by the other party prior to reaching any agreement.
Do I need to Disclose Property that is in my name?
If in doubt, we suggest to disclose all assets and liabilities.
Under the BC Family Law Act, when married or common law spouses separate, each is entitled to 50 per cent of “family property” that either or both acquired during the relationship. This includes real estate, vehicles, bank accounts, investments including RRSPs, pensions and business interests. It doesn’t matter under the Family Law Act who paid for the property or whose name it technically is in. Similarly, debts taken on during the relationship are also shared. There are some exceptions, usually dealt with under a category called ‘excluded property’. Excluded property includes property owned by one of the spouses before the relationship. It also includes inheritances, significant gifts, some windfalls, and certain insurance or damages payments. These are usually not shared with the other spouse on separation. This is the starting point under the Family Law Act, and there are times when the court will depart from the usual rules – for example, if the result would be ‘significantly unfair’.
Parties in a mediation are not obliged to divide things exactly the way the courts would, or follow the Family Law Act procedure precisely. Mediation can be more flexible and offer more creative solutions than those proposed by the Family Law Act. But the Family Law Act still does insist on each party being fully aware of the financial position before entering into an agreement regarding division of property. Therefore courts will often order that parties disclose certain information, such as bank statements, investment portfolio details and income tax assessment details to confirm income. As mediators, we do not have power to compel or verify completeness of financial disclosure, and it is for parties to satisfy themselves as to the sufficiency and accuracy of any financial disclosure provided. However, we encourage parties to share this information prior to the mediation – and there are very good reasons for all parties to provide honest and full disclosure.
Remember, assets that are not disclosed may not be protected by the separation agreement. We therefore ask all parties to request and provide full disclosure of all assets and liabilities to the other party – no matter whose name a particular asset is in. If in doubt, disclose!
Obtaining help with disclosure
If you require assistance in compiling disclosure, and your list of assets and liabilities, or to obtain a better understanding of the assets to be divided, we often suggest the services of a neutral financial divorce specialist. We regularly recommend neutral specialists such as Bettina Plendl who assists both parties neutrally in compiling details of the assets to be divided and sourcing disclosure. Note: we require the use of a neutral financial divorce specialist to compile a financial report in matters where the pool of family assets is > $2 Million.