What is full financial disclosure in Family Mediation and how do I prepare for it?
Family mediation often involves negotiating three major areas: a parenting plan (which includes both parenting time and decision-making responsibilities), supports calculations (child and spousal) and division of property. Working through your finances requires full financial disclosure of both spouses so they both negotiate with full knowledge of each other’s assets and arrears.
All of these require both parties to know their own financial portfolios and their partner’s. Without that disclosure partners would be in the dark about the finances of the other party and the mediator cannot help facilitate that negotiation process. It is a misconception that mediation or a litigated divorce can occur without financial disclosure.
This process can be lengthy and emotionally charged since the parties have to put aside time to collect all relevant information and share that with one another. Your mediator should tell you what documents are needed in your specific case, but generally speaking you need to collect information in three areas: income, assets, and arrears.
What are the documents that you need to collect for financial disclosure?
Income
You must know all the sources of income that you’re collecting and these could be your employment income, self-employment income, disability income, business interest, investment property, etc. Anything that is considered as your source of income must be declared.
In addition to the above proof, you must gather your Notice of Assessment from Canada Revenue Agency for the past 3 years, any corporate income tax, and income tax summaries (i.e. T1 General especially for self-employed individuals).
Assets
You must collect a list of your assets, proof of their current value and their value on the date of separation. If you and your spouse don’t agree to a date of separation, that can be worked through with a mediator. These assets could be: any property that you own (this includes your family home, a cottage, any other property that might a rental property or land); any RRSP, RESP, pensions, disability benefits, bank accounts (checking and saving), stock options, and anything else with a value of over $1000 (this can include a car, a boat, an RV, jewellery, painting, etc.).
Arrears
You must also collect a list and amount of all your debts including: any mortgages, line of credits, credit cards, student loans, car payment, etc.
Any party going through a separation and/or a divorce process must collect this information as is required under the law. In mediation, we ask that you collect all these and share them with your mediator and your spouse so you both know each other’s finances and can negotiate knowing every relevant information.
How will this information be used?
We will put all the relevant numbers into their appropriate forms in order to calculate support and division of family property. These are governmental forms used by all divorce lawyers and mediators for such calculations. At the end of your financial mediation, you will have seen the numbers for child support, for spousal support and the equalization payment that one spouse has to make to the other when the family property is divided equitably.
One of the importance of mediation is the understanding that parties have come together to negotiate with each other in good faith. Part of keeping good faith, is the openness and the honestly of the parties to disclose all their finances to each other in order to create a long-lasting agreement that is based on all relevant information.
The next steps to move forward
Separation is hard. At Parable, we empower families with realistic and concrete tools. In addition to our family mediation services in Ontario, we have created a free negotiation toolkit to take you through a step-by-step process of what you need to know in negotiating a separation agreement with your spouse. This document was created by compiling legal information, research, and our professional expertise in the field. Download it for free here.
