The Financial Statement in Family Law

Form 13.1 Financial Statement

The preparation of a financial statement in a family law Application or Answer is a time-consuming process. The lawyer will usually begin by sending their client a list of items that are required to be submitted to the court as part of the application or in preparation for the conference. It is important to provide full, accurate and up-to-date information. Information, which was omitted, incorrect or otherwise deficient may be used in cost calculations against the party who failed to comply with the rules. If the party is ever cross examined on the contents of their financial statements, failure to provide satisfactory answers about its calculations could impact the outcome of trial in a negative way.

There are two types of financial statements in family litigation. The first the Form 13 financial statement, which is filed by a party making or responding to a claim from spousal support, child support and/or a claim for child support in an amount different from the table amount specific under the Child Support Guidelines. Because the form is used for support claims only, it focuses primarily on the income and expenses of the parties. In the first part, both parties must disclose their respective incomes, sources of income and other financial benefits they may enjoy. In the second part the part, the parties disclose their living expenses. Why a lot of this consists of guesswork and approximations, it is important to fill this form out diligently. Expenses which fall well outside of what is reasonable, or which are proven to be incorrect during a trial or examination, will impact the litigation process in a negative way. Finally, the partis will fill out a list of the of their assets and liabilities, along with a net worth calculation based on their balance.

If either party is claiming or responding to a claim for property or exclusive possession of the matrimonial home and its contents, with or without a claim for other relief, a Form 13.1 must be filled out and served. The first part of this form looks exactly the same as a regular Form 13 financial statement. However, this form continues to parts 4 through 9, in which each party discloses a much more detailed financial picture.

The parties are each required to fill out all assets they own, inside and outside of Ontario. This includes properties and assets owned overseas. All real estate, bank accounts, securities, savings, pensions, personal vehicles, value of household items and others must be disclosed in this part of the form. Further, each party must disclose any interests that they may have in a business. This includes shares in a corporation and accounts receivable which may be owed to any business entity they have an interest in. As in Form 13, each party must also provide a detailed account of their various debts and liabilities.

  • In equalization proceedings some property is “excluded”. This encompasses property which was not obtained by both parties acting together and/or otherwise not intended for equalization between the parties. Excluded property as defined in the Family Law Act is:
    property, other than the matrimonial home, that was acquired by gift or inheritance from a third person after the date of the marriage;
  • income from such gifts or inhertiences 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;
  • proceeds or a right to proceeds of a policy of life insurance;
  • property, other than a matrimonial home, into which property referred to above can be tranced;
  • property that the spouses have agreed by a domestic contract is not to be included in the spouse’s net family property; and unadjusted pensionable earnings under the Canada Pension Plan.

Once the financial statement is completed, each party will calculate the net family property in the final section and swear the document in front of a commissioner of oaths.

The final document that needs to be served and filed along with the Form 13.1 Financial Statement is called the Certificate of Financial Disclosure. The parties will attached all financial information to this document, unemployment payments, bank account statement, pensions, RRSP’s, valuation documents, special assessments, corporate earnings, as well as all any other documents which may be required to assist a case management judge is assessing the financial picture of the marriage.

While it is common for one or more of the parties not to provide certain information, or fail to update it by the time of the first conference, this is generally unwise. Any failure to abide by the rules may result in a cost assessment against the offending party.

This article does not constitute legal advice and was written solely to provide information. If you are seeking legal advice, please call Empel Law Professional Corporation at 416-500-1937.

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