What is Financial Disclosure?
Financial disclosure is extremely important to ensure transparency when resolving family law matters involving property settlements, spousal maintenance and/or child support. This refers to the obligation for each party to provide their financial documents to the other party.
The first step that must be taken in property settlement matters is determining what the parties’ net asset pool is, that is, the net value of all your assets, liabilities and superannuation. In order to do this, a mutual exchange of financial disclosure must occur between the parties. This is not only a necessary process, but an obligation to provide full and frank information about your financial position to your former partner/spouse regardless of whether Court proceedings are underway.
This process involves disclosing all assets, liabilities, income, expenses and financial resources held in your sole or joint names, whether in Australia or overseas. The main reasons for this requirement are:
1. It ensures both parties have transparency and a clear picture of each other’s financial position so that informed decisions can be made.
2. It allows for a just and equitable division of property.
3. It was previously an obligation under Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, and from 10 June 2025 this legal obligation has been strengthened by including it in legislation under Section 71B of the Family Law Act 1975 (Cth).
4. It is an ongoing obligation as financial circumstances fluctuate over time. Financial disclosure is not a one-off event, and parties must continue to update their disclosure as their financial positions change while they work towards resolving their property settlement.
What Documents Are Required?
To fulfill the duty of financial disclosure, parties are required to provide, including but not limited to:
• Tax returns and notices of assessment
• Bank statements
• Superannuation statements
• Payslips and evidence of other income (e.g., rental, dividends)
• Details of all assets (real estate, vehicles, shares, business interests)
• Details of all liabilities (loans, credit cards, tax debts)
• Trust and company documents, if relevant
Consequences of Non-Compliance
If parties do not provide full and frank disclosure, applications may be made to the Court compelling the other party to comply with their disclosure obligations. The duty of full and frank financial disclosure is a serious obligation, and therefore, serious consequences can result should a party not comply with this obligation during family law proceedings in court. This can include:
• The Court may make cost orders against the non-compliant party
• The Court may dismiss or stay some or all of the proceedings
• Being found to be in contempt of court and a fine issued or imprisonment
During the court proceedings, if there are concerns one party is not providing full and frank disclosure, requests for information can be sought through ways such as subpoenas and conducting ASIC or land registry searches.
The Role of the Balance Sheet
Once disclosure is exchanged, a balance sheet is prepared. This is a working document that:
• Summarises the net asset pool for adjusting
• Lists all assets, liabilities, superannuation, and financial resources
• Identifies areas of agreement and dispute regarding values
• Is updated as new information comes to light
If parties cannot agree on the value of an asset, valuations may be required.
Special Considerations: End of financial year
The end of financial year is a critical time for financial disclosure. Tax returns and businesses /company’s financial statements will need to be prepared as they are a key source of information about income, deductions, and the value of financial interests.
As you prepare your tax return:
• Ensure all income is accurately reported.
• Gather supporting documents (PAYG summaries, dividend statements, rental income records).
• Update your lawyer with your latest tax returns, notice of assessment and company financials as soon as available.
• Be aware that any tax liabilities or refunds may need to be included in the balance sheet.
How to Make the Disclosure Process Easier
We understand that collating financial disclosure can be an overwhelming process, particularly whilst navigating the complexities and emotional weight of separation.
We have listed the following tips that may help you to collate your relevant information:
• Be Organised: Start gathering your financial documents early. Create a checklist and keep digital copies.
• Be Honest: Full and frank disclosure is not optional. Attempting to hide assets or income can have serious consequences.
• Communicate: Let your lawyer know if you are having trouble obtaining documents or if your financial situation changes.
• Ask Questions: If you are unsure what is required, ask your lawyer for clarification.
• Update Regularly: As new documents become available (e.g., updated bank statements, tax returns), provide them promptly.
• Label Clearly: Name your files and documents clearly (e.g. 2024 Tax Return) to streamline the review process.
By understanding the importance of financial disclosure and the balance sheet, and by being proactive and organised, you can help ensure your family law property matter is resolved as efficiently and equitably as possible.
If you have any questions about your disclosure obligations or need assistance with a family law matter, our team is here to help you.
About Us
Cominos Family Lawyers (CFL) was established in 2010. Since this time, we believe in a world where people divorce and separate with dignity, respect, and care.
It is our mission to deliver clear, timely and relatable advice for all our clients. Trust. Integrity. Care.
Contact Cominos Family Lawyers
Email: team@cominoslawyers.com.au
Website: www.cominosfamilylawyers.com.au
Phone: 02 8999 1800
Disclaimer: The information contained in this article is intended for general information only and is not to be relied upon as legal advice.