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Document Management for your BusinessApril 19, 2014
People who are getting divorced often believe that it is in their best interests to try to keep secrets about the existence of or the true nature of assets from their spouse. What those people do not understand is that by hiding assets, or lying about their true value, they actually risk that the entire deal they have reached with their spouse could be overturned.
In Medicine Hat, and in all of Alberta, spouses who are divorcing are not only supposed to disclose to each other all of what they own, all of what they owe, and all of what they earn, but the Supreme Court of Canada has said that spouses actually owe each other a duty to disclose, or provide to your ex-spouse, all of this information. Alberta is what is known as a full disclosure jurisdiction. That means, unless spouses have all the financial information, they cannot enter into an Agreement to divide matrimonial property. If they do enter into an Agreement, a Court may determine at a later date that the Agreement is not valid and enforceable. Anyone who relies on such an Agreement may be surprised to discover that a Court would be quite willing to divide any assets and income that were not disclosed at the time the Agreement was signed.
The Rules of Court of Alberta have a specific form called a Notice to Disclose that states exactly what information is supposed to be disclosed if you are getting divorced and dividing matrimonial property. The documents to be disclosed are as follows:
- Income tax returns for the last three years;
- Notices of assessment from Canada Revenue Agency for the last three years;
- Pay stubs for the last three months, including the year to date income;
- A statement of income from any other source;
- A statement showing the total amount of student funding received;
- If you are self-employed;
- The particulars of every cheque issued to you in the last six weeks from any business you have an interest in;
- The financial statements for your business for the last three tax years;
- A statement showing the breakdown of salaries, wages and management fees you received for the last three tax years;
- If you are a partner in a partnership, confirmation of your income from the partnership for the last three tax years;
- If you have more than a 1% interest in a corporation the following documents:
- The financial statements for the last three years;
- A statement showing the breakdown of salaries, wages and management fees for the last three tax years; and
- A record showing any shareholder’s loan transactions for the last twelve months.
- A detailed list of special or extraordinary expenses for the children;
10. If you are a beneficiary under a trust, a copy of the trust agreement and the last three financial statements;
11. Your bank statements for the last six months;
12. Your credit card statements for the last three months;
13. Your monthly budget
14. A sworn statement of assets, debts, and income;
15. Statements for all your RRSPs, pensions and investments;
16. A list of any property you own that is exempt from division.
If either spouse keeps secrets about the information requested, the Court has the ability to Order that it be provided. The Court can also punish someone for repeated failures to disclose by, among other things, imprisonment, imposing a fine or refusing to allow that person to file or rely on Court documents.
Given the fact that punishments can flow for keeping secrets, and that any assets that are discovered will be divided in any event, it is in each spouse’s best interests to disclose all of what they own, owe and earn, as required by the law. To do otherwise, simply postpones the inevitable discovery of assets and complicates matrimonial property division unnecessarily.