The Importance of Financial Disclosure During Divorce Proceedings

What we’ll cover:

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1. What is the financial disclosure process?
2. What financial disclosure is required?
3. What are the consequences of financial non-disclosure?
4. What powers does the court have for financial non-disclosure?
5. What about if you have concerns of hidden assets from your spouse but no proof?
6. What happens when your spouse refuses to complete Form E?
7. Does inheritance need to be disclosed?
8. What about assets in a family trust?
9. Why is obtaining professional legal advice so important?

What is the financial disclosure process?

When considering what the appropriate financial settlement during divorce proceedings should be, the starting point is for both parties to provide full and frank financial disclosure. It is a requirement, where court proceedings are issued to deal with financial matters, with both parties needing to provide full financial disclosure. Even where there are no court proceedings, invariably the starting point is for both parties to provide financial disclosure before any financial provision arrangements can be properly considered.

It is impossible for a lawyer to provide informed, accurate and detailed advice to their client as to the appropriate financial settlement without first having had sight of the other parties’ financial disclosure. Understandably, this makes financial disclosure fundamental to the entire process of assisting a client to reach a satisfactory financial settlement.

Disclosure is generally made using what is known as Form E. This is usually completed within set timeframes, typically within 4-6 weeks and exchanged simultaneously between parties. Form Es require supporting documentation for all entries, such as 12 months of bank statements for all accounts.

Follow-up requests for further information or documents (known as Questionnaires) are common before the parties then consider possible settlement negotiations. There is also an ongoing obligation to update financial disclosure if circumstances change, such as job changes or asset disposals. This duty of disclosure continues until a settlement is reached and a court order is made/approved.

Provided full and frank financial disclosure is provided by both parties and if an agreement is then reached, the parties are then encouraged to set out this agreement in a financial order (also known as a consent order), alongside a document known as a Statement of Information (D81). The D81 sets out in very brief form the parties’ assets, income, and liabilities both before the agreement is approved and what they will be after the agreement is reached.

What financial disclosure is required? The importance of Form Es and supporting documents

Properties

• All properties owned must be included – such as the family home, holiday homes, other properties/homes, and investment properties (such as buy-to-lets). This also includes any properties owned outright (sole owner), jointly (with your spouse or another), through companies/businesses or through a trust. All properties must be disclosed whether in the UK or abroad.
• Current market valuations should be obtained, ideally estate agent valuations rather than estimates. Again ideally, valuations for properties jointly owned by the spouses should be obtained jointly.
• The amount outstanding on any mortgages whether residential or commercial, with up-to-date current balances and any payment terms. It is important to obtain redemption statements or information from the lender which will also show any charges or early repayment (ERP).

Bank Accounts

• All bank accounts, building society accounts, and savings. This includes all accounts in your name (sole and joint), including any accounts with minimal balances, recently closed accounts (in particular in the last 12 months) or dormant.
• All investment accounts, including ISAs, bonds, and any shares, along with their current market value.
• Premium bonds and other financial products that could be converted to cash.
• Any insurance policies with surrender values.
• Cryptocurrencies and digital assets.

Income

• Income and benefits from employment which includes basic salary, overtime, commission, and any benefits such as share options, health insurance and company car.
• Regular bonuses and commission must be also disclosed. And so must, disclosure of any future changes in income such as promotions, redundancies, or career changes (and anything that could affect income).
• Income from any state benefits such as universal credit etc
• If self-employed, need to provide details of business income/earnings, including drawings, dividends, and benefits. The companies/business accounts will be important.
• All income from investments, including rental/property letting income, holiday rentals, dividends, and interest payments.

Pensions

• All pension schemes, including private, workplace, and state pensions.
• Current valuations (within the last 12 months) from each pension provider (Cash Equivalent Transfer Value) will be required.
• Confirmation as to whether a pension is in payment and whether any funds have already been withdrawn from a pension.

A Guide to Pension Sharing on Divorce

Debts and Liabilities

• Up-to-date statements showing any current credit card balances.
• Details all loans, including their purpose, outstanding balances, and repayment terms.
• Any outstanding tax, including income tax, capital gains tax, and anticipated future liabilities.
• As well as any other financial obligations.

Company/Business Interests

• Details of all shared ownership/shareholdings.
• Details of any loans (such as a director’s loan) between you and the companies, including repayment terms.
• Company accounts for the last two years are recommended.A professional business valuation where appropriate is recommended, including transparency on the methodology and assumptions used to reach the valuation.

What are the Penalties and Enforcements for financial non-disclosure?

Failing to provide full disclosure can have significant legal consequences. In the case of Cummings v Fawn (2023), a failure to disclose led to the court finding that the husband had committed fraud and consequently a previous court order detailing a settlement between the parties was set aside. The husband had failed to disclose that he had received an inheritance.

A more recent example can be seen in the case of Gohil v Gohil & Ors [2025] EWHC 3646 (Fam), where decades of litigation followed allegations of material non-disclosure and ultimately resulted in a multi-million-pound award.

Whilst in Goddard-Watts v Goddard-Watts, the husband misrepresented his finances, resulting in not one but two Orders being set aside.

In 2010, Mr and Mrs Goddard-Watts divorced, and her husband, a highly successful businessman, moved to Switzerland. They agreed a financial remedy order, in which the wife was awarded the matrimonial home and a not-inconsiderable lump sum of £4million.

In 2015, that first Order was set aside because the husband had deliberately misrepresented trust assets as being for the benefit of the children, when they were not. A new Order was made which took into consideration just these undisclosed assets and apportioned them between the ex-husband and wife. As a result, the wife received a further £6.42m, calculated as half the value of the undisclosed trusts plus monies for the delay in the wife receiving that money.

However, in 2016 this Order was in turn set aside based on evidence relating to the valuation of the husband’s company. It came to light that the husband had made an offer to sell the company for a much higher price (£100m) than that given during the trial (£30m). This offer was made in between the handing down of the draft judgment, and its formal handing down (the final judgment).

The duty of full and frank disclosure goes on throughout the whole financial proceedings, including right up until the final judgment is given. The husband should have therefore disclosed this sale price at the time the offer was made, and when the sale later took place.

As a result, the court found that had the husband disclosed the information at the time, the judge would have rewritten parts of his judgment and would have made a significantly different order.

The court also addressed the issue of innocent or fraudulent non-disclosure. In this case, the husband was an adult of full capacity who deliberately withheld information and documents not only from the court but also from his own legal team. He knew he should disclose, so was dishonest and in relation to non-disclosure, therefore fraudulent.

This issue of fraud is important because it changes the action the court would take:

• The court would set aside an order for non-fraudulent disclosure if the court would have made a substantially different Order had the full facts been disclosed.
• In the light of deliberate fraud, if the court was satisfied that the Judge would not have made a different order in the light of the new facts, then the existing order would be set aside, and a rehearing ordered.

This changes the previous emphasis from the exception being at the time when the order was made, the fraud would not have influenced a reasonable person to agree to it.

What powers does the court have for financial non-disclosure?

The courts take non-disclosure extremely seriously and have various powers to address it, such as:

• Drawing adverse inferences about undisclosed/hidden assets. 
• Making costs orders against the non-disclosing party. 
• Previous settlements can be reopened if non-disclosure is proven, and the court can set aside financial orders based on incomplete disclosure.
• Potential committal proceedings for contempt of court which can result in fines or imprisonment.
• Non-disclosure can lead to criminal proceedings in cases of deliberate fraud.

Do you have concerns of hidden assets from your spouse but no proof?

Understandably, sometimes clients are suspicious and have non-disclosure concerns.  Some of the general concerns are set out below: 

• Hidden assets or income such as undisclosed bank accounts, cash savings, or income streams.
• Undervalued business valuations. 
• Assets transferred to friends, family, or offshore structures to hide their existence. Offshore accounts and investments require additional investigation.
• Undeclared digital assets such as cryptocurrency can be particularly difficult to trace without accurate disclosure.

However, making an application to court seeking an order for further disclosure is risky without strong evidence to support the concerns. The court will not support a “fishing expedition” where an application is made based on suspicion only (evidence is paramount).

It is important to keep in mind that clients need to be very careful about looking for potentially hidden assets. Accessing your spouse’s post, computer or phone without consent. The courts generally do not recommend or approve of copies of a spouse’s personal letters/information being taken.

This is usually considered a breach of confidentiality and was established in the Tchenguiz & Others v Imerman in 2010. In this case, Mrs Imerman was about to start divorce proceedings against her husband. Mrs Imerman’s brother had concerns that Mr Imerman would not disclose his true financial situation once divorce proceedings were started and as Mrs Imerman’s brother shared an office with Mr Imerman, he decided to access Mr Imerman’s computer and downloaded hundreds of thousands of documents.

A long judgment was handed down but, in essence, Mrs Imerman was ordered to return the documents to Mr Imerman, and the Court of Appeal confirmed the documents could not be relied upon.

In short, when it comes to copies of a spouse’s personal documents, it can be summarised as follows:

• Documents removed illegally from a spouse must be returned to their owner.
• However, the owner’s disclosure obligation is activated by that return.
• The spouse who has returned the documents can rely on their recollection of the content of any relevant document.

The court has to strike a balance between the need for full and frank disclosure, but also deter parties from obtaining documents illegally.  If you believe that your spouse is not being honest or making full disclosure, it is important that you obtain advice on the best available options. 

A few options to consider when suspecting non-disclosure include: 

• Keeping detailed records of any suspicious financial transactions/movement for example transferring a property to a sibling/parent or transferring sums of monies to other third parties. 
• Using court orders for third-party disclosure. This then requires banks and other institutions to provide information as to the sums of monies transferred by your spouse to other third parties. 
• Monitor unusual financial patterns such as unexpected changes in spending or lifestyle are also key and should be documented. 
• Professional experts such as forensic accountants may be needed for complex cases.

What happens when your spouse refuses to complete Form E?

If legal proceedings have not been issued and the other party refuses to complete or sign Form E, mediation is an alternative route to resolve matters, where parties attend before an independent mediator with a view to hopefully reaching an agreement.

Learn about the benefits of family mediation.

Once divorce proceedings have started, the consequences of not completing a financial statement when due can be serious, as the court has the ability to make an order that the non-compliant party pays the other party’s costs and can infer that the party refusing to comply is being dishonest and award the other party a greater share of the assets.

Does inheritance need to be disclosed?

One aspect of financial disclosure that can be confusing and disputed, is inheritance. Any inheritance received at the time of the divorce should be included as part of the assets and in your Form E. However, simply being named in a will is not an asset that needs to be disclosed as this is not a guaranteed asset, as wills can be changed.

What about assets in a family trust?

The existence of a trust and its terms will need to be disclosed as part of financial disclosure on divorce. If your husband or wife is a beneficiary of a trust fund, the position on whether this will be included in assets (and should be disclosed) is quite complicated. Generally speaking:

• It will depend on when the trust was set up – before or after you were married. It is better for you if it was after.
• It will depend on the type of trust and how it works.

In other words, what kind of entitlement does your spouse have, has he or she received any benefit during the marriage, is it purely discretionary or not? The court will want to assess the likelihood your spouse will benefit, possibly over what period and how much.

The importance of obtaining help and advice from a family lawyer

Financial disclosure can be complex and time-consuming. Our experienced family law team can:

• Explain each step of the financial disclosure process and help you prepare your Form E correctly (as well as ensure that all supporting documents are also collated).
• Review your spouse’s financial disclosure and identify any discrepancies and sections that require further investigation. In the event missing information is identified, we will draft a Questionnaire and/or Schedule of Deficiencies (if further information is still unclear or remains outstanding).
• Provided that full and frank disclosure is complete, we will then be able to advise you on fair and reasoned proposals for settlement at an early stage to avoid lengthy and costly court proceedings. We can also advise you on any proposals that are made by your spouse. 
• In circumstances where your spouse has not been truthful with their disclosure, we will then advise and discuss with you options to deal with this, obtain the missing information, make any necessary applications to the court, and obtain reports as appropriate. Such as seeking a freezing injunction, third-party disclosure order, a reversal of any property transfer that may have occurred and ask the court to ‘add back’ dissipated assets which will then form part of the matrimonial assets/pot which will then be available for division. As well as formal business valuations, expert property valuations, tax experts and so on. 
• We ensure that you are protected every step of the way and achieve the best outcome possible in your circumstances. We can, therefore, advise you on making offers of settlement, as well as assist with any proposals made by your spouse. 

Contact GoodLaw Solicitors

Financial disclosure in divorce proceedings is paramount and expert advice on this should be obtained at the earliest opportunity, even in cases involving no fault divorce.

If you are considering your position following marriage, our family team can provide tailored advice on how to best protect your financial position in contemplation of separation.

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