Guest post by Katherine Kennedy, Solicitor at Coote Family Lawyers.
Management of joint finances varies between relationships. Some people prefer this responsibility to be shared, while others assign one person to oversee their household’s finances. When a relationship breaks down, a common concern is that the person who has more knowledge about the finances will have an advantage over the person who is less informed. Fortunately however, a lack of involvement in shared finances doesn’t put someone at a disadvantage when it comes to resolving a financial settlement.
According to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (‘the Rules’), each party in a family law proceeding must provide ‘full and frank’ financial disclosure to enable negotiations to be conducted and the matter processed. This requires each party to present all documents that give a clear and accurate picture of their financial position to their ex-spouse or ex-partner. Any relevant financial material within the possession or under the control of a party may have to be disclosed to the other side.
Financial disclosure can be provided in many forms, including personal financial documents to clarify income, property interests, shareholdings, cryptocurrency assets and debts, as well as business interests. It also applies to property that has been sold or transferred by a party after a separation to ensure a party cannot hide their assets by simply transferring, or ‘gifting’, them to someone else in the short term. For parenting matters, disclosure includes material that might have an impact upon the care of children, including any ongoing health conditions, criminal offences or the parties’ respective work commitments.
The purpose of financial disclosure is to create transparency in family law negotiations. It is not important if one person was responsible for finances during the relationship, or if they are unsure as to how the party’s income was applied to expenses during their relationship. Ultimately, if there are assets, interests, or debts, that were held in either party’s name or have accumulated during or after the relationship, information about these matters will need to be disclosed.
If it is suspected that a party is not complying with their duty to provide full and frank financial disclosure, the Rules provide further options for obtaining relevant information and documents, including the issuing of subpoenas for the production of relevant documents by third parties or organisations. Subpoenas create a significant legal obligation to provide specific documents, and by approaching a source directly, ensure that a party is unable to restrict or influence the requested information.
Each relationship is unique and has differing needs, therefore there is no one size fits all solution when it comes managing joint finances. In the event of a relationship breakdown, it is reassuring to know that limited involvement in shared finances does not put a person at a disadvantage in reaching a fair financial settlement.
