Preparing For Mediation

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Basis for Disclosure:  Financial Disclosure is not only important to resolve family law issues it is mandatory.  The financial statements you provide will be the basis for making agreements and obtaining Orders from the Court.  A financial statement is prepared and then sworn or affirmed to be the truth under oath.  A sworn document is a form of giving evidence to the Court and has the same impact as if you had attended in Court personally.  Failing to provide truthful, complete and accurate financial disclosure can result in the setting aside of any Order obtained on false information or any agreement being set aside. 

Date of Marriage:  This is the date when you and your partner entered a legal marriage or a marriage conducted in solo form. 

Valuation Date: In order to divide the matrimonial property between married parties this is the date that crystallizes the value of the property which will be divided between the married parties.  Property accumulated after the date of separation continues to remain the separate party of the individual acquiring unless it is jointly purchased. 

• The date the spouses separate and there is no reasonable prospect that they will resume cohabitation.
• The date a divorce is granted.
• The date the marriage is declared a nullity.
• The date one of the spouses commences an application based on s. 5 (3) (improvident depletion) that is subsequently granted.
• The date before the date on which one of the spouses dies leaving the other spouse surviving.

Excluded Property: Exclusions are important because this is property that is not shared between the married spouses.  

• Property, other than a matrimonial home, that was acquired by gift or inheritance from a third person after the date of the marriage;
• Income from property referred to above, if the donor or testator has expressly stated that it is to be excluded from the spouse’s net family property;
• Damages or a right to damages for personal injuries, nervous shock, mental distress or loss of guidance, care and companionship, or the part of a settlement that represents those damages;
• Proceeds or a right to proceeds of a policy of life insurance, as defined under the Insurance Act, that are payable on the death of the life insured;
• Property, other than a matrimonial home, into which property referred to in the above paragraphs can be traced;
• Property that the spouses have agreed by a domestic contract is not to be included in the spouse’s net family property;
• Unadjusted pensionable earnings under the Canada Pension Plan.  

Form 13.1 Support Claims Only: In the event the only financial issues between you and your former partner relate to the payment of either spousal or child support you will need to complete this statement.

Form 13 Support and Property Claims:  In the event you and your former partner have issues between the two of you in relation to property you must complete this form.  The Form 13 contains three categories (1) property value you had on the date of marriage, (2) property value on the date of separation and (3) the value of the property on the date you swear the documents.

Each of Form 13.1 and 13 each require the same information but the information is applied in different manners.  Financial Statements which are completed to address support issues only do not include the reporting of property that was owned on the date of marriage.  

The financial statements require information under each of the following categories:

• Income: which is reported from all income sources and you must disclose all of the income you are currently receiving;
• Other benefits:  these are benefits you have not had to pay but are paid on      your behalf by your employer such as medical benefits, a company car, company cell phone etc.
• Expenses: this is the best estimate of your overall current expenses and if the      expenses are shared with another individual you are obligated to disclose      which expenses are shared and the appropriate sharing. Where an      expense does not occur on a regular monthly basis such as car repair or      house repair make an assessment of the annual expense and break the      expense down to a monthly expense.
• Other Income Earners in the Home: you are required to disclose who resides in your home and their contribution towards the overall household expenses
• Assets In and Out of Ontario:  In the case of having to divide property between married individuals and equalize their property the property which is divided is worldwide.  

Assets include: 

• Land: you are required to report all land in which you have an interest, any       leasehold interests, or mortgages whether you own the property alone or       with another individual.
• General Household Items, Vehicles, Jewelry and other Special Items: You       need to estimate the value of the of your share of the furniture, appliances, jewelry and special items. A special item can include items such as special collections (sports cards, antiques, etc.), snowmobiles, tractors etc.  
• Bank Accounts, Savings, Securities and Pensions:  Please list every       account and plan which you have an interest in including financial       instruments which you hold jointly with another individual.
• Life & Disability Insurance:  report all plans available to you including       the particulars such as is the plan whole life or term, does the policy       have a cash surrender value, is there any loans against the policy.
• Business Interests: list any company or firm, either incorporated or       unincorporated, in which you have a business interest. “Business       interests” include sole proprietorships, partnerships (limited or     otherwise), joint ventures and all types and classes of corporate shares       (not already listed under “Securities” above). 
• Money Owed to You:  list all monies owed to you, either personally or from a business.
• Other Property: list any other property you can think of which is not listed in any other asset category, such as silver or gold bars, intellectual       property (e.g. patents, trademarks, copyrights), collectibles or       collections (not already included above), air miles, other credit card       reward points, horses and other valuable animals, musical instruments,       etc. 

• Debts and  other Liabilities: list any debts you have in the appropriate column of the financial statement. 
• Property Debts and Other Liabilities on the date of Marriage: This      information is included only in a Form 13.1 financial statement.
• Excluded Property: is property that is not required to be included in the      calculation of your Net Family Property pursuant to the Family Law Act      (see list below). Excluded property will already have been shown in the previous sections of the Financial Statement, and will be effectively      “cancelled out” in this section. 
• Disposed of Property:  you are required to disclose the information about      property which you disposed of within two years of completing the      financial statement. The purpose of this section is to determine whether or not assets have been sold or disposed of under circumstances in which the value received was not appropriate.

Before you sit down to complete your financial statement you will have to spend some time gathering documents to assist you in preparing your financial statement. Remember the financial statement is sworn and is evidence so if you have a firm value you will want to have the supporting document. Having the document confirming the value of the item you are reporting will eliminate any challenge to the value your report. You are responsible for providing the value for your assets:

• Income: financial statements have attached to them your notices of Assessment for the three-year period prior to swearing the financial statement and the Income Tax Returns should also be provided to your legal counsel. Canada Revenue has a web-based storage center for all your relevant income information. If you have an account bring the Username and Password with you to your lawyers office if not open a My account at      http://www.cra-arc.gc.ca/myaccount/ at the web address you will see a blue box titled CRA login for those with an account and CRA register for those who need to set up their account.  Each time you attend with your lawyer bring a current pay stub to the appointment.
• Other benefits:  bring a list of your benefits which you receive from your employer. Bring your benefit book or information on how to access your benefit plan.
• Expenses: gather your monthly statements which you were paying on the date of separation.
• Other Income Earners in the Home: This is your financial statement and you will be asked to address the division of the household expenses and justify whether the expense is reasonable.  Your partner cannot make double your income and pay one-tenth of the expenses.  If someone is contributing towards your household expenses bring their most recent tax      return to your appointment with your lawyer.
• Land: obtain your MPAC (municipal taxes assessment), obtain written opinions from real estate agents about the value of your home, you may have to obtain an appraisal of the home and land and this will require a licenses appraiser to be hired.
• General Household Items: make a list of the items within your home and it is best to report the items room by room.
• Vehicles: attend at the Ministry of Transportation Offices and obtain the sale package, attend with a dealership and obtain an appraisal of the value of the vehicle, look up a blue book value for the vehicle;
• Jewelry: if you have the jewelry insured bring the appraisal in support of the jewelry, bring the individual items to be valued and obtain an appraisal report.
• Bank Accounts, Savings, Securities: gather the bank statements for a period of three months before and after the valuation date or date of separation, request confirming correspondence from any institution you deal with requesting confirmation of each account you maintained with their institution and the value.
• Pensions: If you have a work-related pension request the most recent pension statement available detailing the group number and provider.
• Life Insurance & Disability:  request the insurance companies identify the characteristics of the policies and identify the cash surrender value as of a specified date if necessary. Bring a copy of the individualized policy contracts to your legal counsel. Determine who owns the policy and who are the beneficiaries.
• Business Interests: bring any valuations of the company or any income tax returns or financial statement in relation to the business interest to your lawyer. You may have to obtain a valuation of your business interest from a licensed individual.
• Money Owed to You: compile all documents evidencing the money that is owed to you.
• Debts and other Liabilities: gather all billing statements which exist at the time of filing the financial statement and in support of the valuation date if necessary. 
• Property Debts and Other Liabilities on the date of Marriage:  the same documents which are necessary to determine the current value will assist in determining the value on the date of marriage.  Depending on the time lapse between the marriage and the date of separation it may be necessary to contact the historical records of the holders, such as banks, life insurance companies.  Be prepared to cover the costs of obtaining historical information.
• Disposed of Property: bring in your documents evidencing the disposal of the items.
• you are required to disclose the information about property which you disposed of within two years of completing the financial statement. The purpose of this section is to determine whether or not assets have been sold or disposed of under circumstances in which the value received was not      appropriate.