Ending a relationship is never easy. The process can be even more complicated when financial ties are involved. One important issue that must be addressed is the disclosure of financial information.Depending on the nature of the relationship, both parties may be legally obligated to disclose certain financial information to each other.
Financial Disclosure Of Assets
When two people divorce, they have to provide the court with a complete list of their assets and liabilities and any exemption claim for the purposes of property division. This is so that the court can divide the property fairly between the two parties.
Proving Employment Income Information
If an individual is receiving a T4 slip from their employer, their annual income can typically be easily determined for the purposes of calculating child and spousal support. The individual’s personal income tax returns, notice of assessment, T4s, and pay stubs will often have the information needed to calculate their Guideline Income. The starting point to determine their gross annual income is using Line 150 on their Income Tax Returns and making any adjustments in accordance with Schedule III of the Federal Child Support Guidelines.
Financial Disclosure If Self-Employed
When it comes to financial disclosure, the process is different for self-employed individuals. This is because their income often reflects aggressive tax planning instead of their actual profits. Additionally, people may try to reduce what they owe to a spouse by manipulating their income.For those who are self-employed or shareholders, directors, or officers of a corporation, income determination can be complicated. Furthermore, determining the value of a business or company for the purposes of property division is a complex process. Often, parties will retain experts, such as forensic accountants or business valuators, to jointly or separately determine Guideline Income and the value of the company.
Under a standard Notice to Disclose, if a party is a partner in a partnership, they need to confirm their income.
Beneficiaries Of Trusts
If you are a beneficiary of a trust, you will need to provide the trustee with a copy of the trust agreement and the three most recent financial statements from the trust.
Other Financial Disclosure Information
In addition to the standard financial disclosure documents required in a Notice to Disclose application, a forensic accountant and other experts may require additional documentation if the applicant is self-employed and earning income from their own company. This additional documentation may be necessary to properly value the company.There are a few exceptions to the requirement to provide financial disclosures in relationship dissolution. Financial disclosure is not required if the couple has been separated for more than two years, if the couple is in the process of getting a divorce, or if one spouse is not able to receive financial information due to age, disability, or other factors. If any of these exceptions apply, both spouses must sign an affidavit stating that they meet one of the exceptions.
In conclusion, It’s important to be mindful of your financial information and how it may be used in the event of a breakup. If you have any concerns, it’s best to speak with a professional to get advice on how to protect yourself.Alberta Divorce Finances can provide you with the bestdivorce financial advice. We will help you understand your finances. Get in touch with us.