Financial disclosure in family law matters

Executive summary 

An essential and important feature of your property and financial settlement is your obligation to provide full and frank financial disclosure. This obligation applies to both married and de facto couples. 

Separated spouses have an obligation to provide documents and information that are relevant, in their possession and control, or have the authority and/or ability to obtain. 

In addition to general disclosure requirements, there are specific rules about full and frank financial disclosure in financial cases. 

This is a complex area of law and the failure to comply with your obligations can have significant and devastating consequences in your family law matter. 

In this article we clarify what financial disclosure is and what your obligations are. We also discuss the types of documents and information you are expected to provide, and the consequences that can arise on a failure to comply with your obligation to provide full and frank financial disclosure. 

What is financial disclosure?

Financial disclosure is a process whereby you provide documents and information to your former spouse to verify your financial circumstances. 

Often, this process is quite straightforward. On occasion, this is a complex process, particularly when dealing with varying corporate structures or those persons with complex personal finances. 

Financial disclosure is essential to identify yours and your former spouses’ assets, liabilities and financial resources. This is the first step in any property and financial settlement. 

What are your obligations? 

In a family law matter you have a duty to disclose all information and documents that:

1. Are relevant to your case; 
2. Are in your possession or control; and
3. You have the authority or ability to obtain.  

This obligation of disclosure starts from inception of your matter until the case finishes, even if there are no court proceedings. 

In short, this duty means that you are required to tell your former spouse, either directly or with the assistance of legal representation, about any changes to your income, disposal of assets by way of sale, gift, transfer or other means, increases in liabilities and any other changes – for example receipt of inheritances, receipt of lottery or other windfalls, losses of significant sums of money.

In addition to the obligation to disclose information, you are required to disclose copies of documents to verify your financial circumstances. 

What documents / information must I provide? 

The Court rules set out a list of documents and information for which it is intended party’s will exchange, in complying with their obligation to provide full and frank financial disclosure of their financial circumstances.

You must disclose documents and information to verify your: 

1. Earnings, including income that is paid or assigned to another party, person or legal entity. For example, pay slips, Notice of Assessment and Tax Return;
2. Any vested or contingent interests in property;
3. Liabilities, including any loan accounts whether mortgage, personal loan, lines of credit or otherwise; 
4. Any vested or contingent interest in property owned by a legal entity that is fully or partially owned or controlled by a party;
5. Any income earned by a legal entity fully or partially owned or controlled by you, including income that is paid or assigned to any other party, person or legal entity;
6. Other financial resources;
7. Any trust:
   1. Of which you are the appointor or trustee; or
   2. Of which you, your child, spouse or de facto spouse is an eligible beneficiary as to capital or income; or
   3. Of which a corporation is an eligible beneficiary as to capital or income if you, or your child, spouse or de facto spouse is a shareholder or director of the corporation; or
   4. Over which you have any direct or indirect power or control; or
   5. Of which you have the direct or indirect power to remove or appoint a trustee; or
   6. Of which you have the power (whether subject to the concurrence of another person or not) to amend the terms; or
   7. Of which you have the power to disapprove a proposed amendment of the terms or the appointment or removal of a trustee; or
   8. Over which a corporation has a power referred to in any of subparagraphs (iv) to (vii), if you, your child, spouse or de facto spouse is a director or shareholder of the corporation.
8. Any disposal of property (whether by sale, transfer, assignment or gift) made by you, a legal entity referred to in paragraph 5, a corporation or a trust referred to in paragraph 7 that may affect, defeat or deplete a claim:
   1. In the 12 months immediately before the separation of the parties; or
   2. Since the final separation of the parties;
   3. Liabilities and contingent liabilities.

Another important issue to note is that if you are in contested court proceedings, you are also obligated to provide the other party with a series of documents. A list of those documents is contained in the Court Rules. 

Collating your disclosure of documents can seem an arduous, lengthy and at times, a costly process. However, your failure to undertake the process in a timely or efficient manner can prejudice to your case and result in higher legal costs.

What happens if I don’t comply with my obligations? 

If you fail to provide disclosure, then there may be certain consequences to you including:

1. Any final Court order or agreement can later be set aside or overturned; and/or
2. The Court has the power to exclude the evidence that has not been disclosed, dismiss your case, make a Costs Order against you or find you guilty of contempt of Court and impose further penalties.

The consequences of non-compliance are being expanded in upcoming changes to the Family Law Act 1975 (Cth) which are due to commence on 10 June 2025. 

Once the new provisions come in, consequences of non-compliance with the duty of disclosure can be significant, including fines and terms of imprisonment. The expansion of these consequences shows the importance of financial disclosure and the elevation of this important obligation. 

Further information  

Should you have any questions about the new changes and how they may affect your property and financial settlement, please contact our team on (02) 7259 4130.