Understanding the Importance of Financial Disclosure in Family Mediation

Ontario family law emphasizes the importance of making decisions based on full financial information and the exchange of financial disclosure is a cornerstone of the mediation process when couples separate and divorce.

Amicable family mediation participants sometimes question the necessity of exchanging financial information. Common objections we hear to the recommendation that mediation participants exchange financial disclosure are that both participants are already aware of one another’s finances, or that they do not intend to divide certain assets or collect support from one another and therefore do not need to see financial information from one another.

Given this, we thought it might be helpful to explain why exchanging financial disclosure is crucial to the family mediation process in Ontario.

Trust and Transparency

A successful family mediation process ideally requires the establishment of trust between participants. Financial transparency is one of the ways in which this trust is established. By revealing their assets, debts, and incomes, mediation participants gain full knowledge and understanding of each other’s finances. Through the financial disclosure process, mediation participants often gain a deeper understanding of their own finances as well. Having a full picture of their entire family finances is an important part of negotiating fair and equitable agreements that meet the needs of all involved.

Facilitating Informed Decision-Making

Completing the exchange of financial disclosure ensures that mediation participants have the information they need to make fully informed decisions as part of the mediation process.

An important aspect of making informed decisions is for mediation participants to understand how the terms of any financial agreement they are considering compares with the law.

It is the role of independent lawyers to explain to mediation participants their financial rights and obligations under the law. Financial disclosure is a mandatory part of the court process in Ontario, as the legal model for the division of family property and the determination of child and spousal support is based upon participants’ financial information. For a lawyer to be in a position to provide proper legal advice to a mediation participant, the lawyer should have access to complete financial disclosure from both mediation participants just as they would if the matter were in court. You can learn more about the role of lawyers in the separation and divorce mediation process in our blog Will We Need Lawyers if We Mediate Our Separation and Divorce in Ontario?

Exchanging financial disclosure as part of the mediation process ensures that mediation participants have access to all the information they need to make fully informed decisions, including accurate legal information and advice from their lawyers.

Compliance with Legal Requirements

The failure of a party to make full and accurate financial disclosure is one of the grounds upon which a Separation Agreement may be set aside in Ontario.

Therefore, exchanging financial disclosure as part of the mediation process and prior to signing a Separation Agreement, helps to protect the validity and enforceability of any Separation Agreement arising out of the mediation process.

Even where there exists signficant trust between mediation participants, providing complete and accurate financial disclosure is an important aspect of each participant meeting their individual legal duties and protecting themselves from the risk that their final agreement could be set aside in the future.

Financial Disclosure Options

As part of a family mediation process that is conducted outside of a court proceeding, mediation participants have options as to how they go about exchanging financial disclosure with one another. These options include:

1) Exchanging individual Financial Statements and disclosure briefs: Financial Statements are documents that each participant completes individually, listing their assets and debts on date of marriage (if applicable), date of separation and the date of the statement, and setting out their current income and expenses. Financial Statements are usually sworn documents, meaning the party will sign the document and swear to the truth of its contents in the presence of a commissioner. Along with sworn Financial Statements, supporting bank or other statements to affirm the accuracy of the information in the Financial Statement are usually also exchanged. Commonly, sworn Financial Statements are prepared with the assistance of a lawyer.

2) Exchanging disclosure documents and preparing a joint Net Family Property Statement: As part of the mediation process, participants may also choose to exchange financial documents with one another and work jointly with a neutral facilitator (either the mediator or separate certified divorce financial specialist) to prepare a joint Net Family Property Statement, without first preparing individual Financial Statements. A Net Family Property Statement is a document that lists each participant’s assets and debts as at their date of marriage and date of separation and is helpful in assessing the parties' respective property rights and obligations under the law in Ontario.

It is recommended that mediation participants consult with their independent lawyers regarding the benefits and potential risks of their disclosure process options.

Conclusion

The exchange of financial disclosure is not merely a procedural requirement but rather a fundamental aspect of the family mediation process where financial issues are involved. By embracing financial transparency, mediation participants lay the groundwork for constructive dialogue, informed decision-making and fair resolutions. Whether navigating property division, support obligations or other financial matters, exchanging financial disclosure empowers individuals to achieve mutually acceptable outcomes with confidence and integrity.

At Teal Family Mediation, we recognize the importance of financial disclosure in the mediation process. Our mediators help guide participants through this critical stage of the process with professionalism and experience. Together, let’s navigate your family law matters with clarity, compassion and respect.

Disclaimer: nothing in this blog post should be construed as legal advice. Should you have questions about your legal rights and obligations, or about your legal process options when you separate, you should consult with a lawyer to receive independent legal advice.

We can work it out. Together.

Teal Family Mediation is team of professional divorce mediators located in Hamilton, Ontario offering mediation services for separating married and common-law couples and co-parents. We provide an alternative to high-cost, inefficient and adversarial court proceedings with an affordable, modern and compassionate approach towards resolution.

We offer services in-person at our offices located in the Ancaster, Meadowlands and virtually from anywhere in Ontario.

 

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