What is a Form E?
The Form E also know as a Financial statement for a financial order is an in-depth financial document which sets out details of your financial assets and liabilities and includes your income and expenditure as well as information about your needs and the needs of any children.
It is one of the most important documents that is considered when finalising and determining the financial division of marital assets following a divorce, dissolution, or separation. The purpose of the financial statement is to enable both parties to provide true, complete, and accurate financial disclosure following the breakdown of their relationship.
The Form E is an ‘open’ document, which means that it can later be disclosed in Court proceedings if it is alleged that one party has lied about the extent of their assets. At the end of the form is a Statement of Truth which must be signed. The statement confirms that the party has provided full, frank, clear and accurate financial disclosure. If it transpires that a party has failed to provide full, frank, clear and accurate financial disclosure, the non-disclosing party may be found to be in contempt of Court, and this can result in them being fined or imprisoned. By signing the Form E, you are confirming not only to the Court but also to the other party to the relationship that you have provided full financial disclosure.
What is financial disclosure?
Financial disclosure is the process where each party provides details of everything of value, such as income, savings, properties, investments, trusts, and more. It also includes details of any liabilities. Because the financial statement is such a detailed and thorough document, it is the preferred method of providing the detailed exchange of financial information and supporting documents which provide evidence and proof of the income, assets, and liabilities.
Why is financial disclosure necessary?
Without knowing what assets there are to split and the needs of each party, it is very difficult to make an informed decision on what is a fair financial settlement. A transparent discussion about matrimonial finances gives both parties an accurate understanding of their respective needs and the assets in the matrimonial pot to allow the parties to reach a financial divorce settlement, which is fair and reasonable to them both.
Financial disclosure can take place in one of two ways:
Voluntary disclosure – This is where both parties agree to provide voluntary disclosure by mutual exchange of financial statements. The financial information that is disclosed in the financial statement is then used to enter into discussions and negotiations with a view to reaching a financial settlement.
If you and your ex-spouse can agree on how to split your finances following financial disclosure, details of the agreement can be included in a financial Consent Order. This Consent Order is then submitted to the Court for approval. If the agreement is considered fair by the Court, it will be approved by a Judge without any need to attend at Court.
Court Proceedings – This is where a party issues a Notice of Intention to proceed with an application for a financial order (Form A) and the Court sets out a timetable for the resolution of financial matters by a Judge. The first step in the Court timetable is for both parties to complete a financial statement and file it at the Court and exchange it with the other party.
Using a financial statement is mandatory when Court proceedings have been issued.
How can a financial settlement be reached?
A divorce financial settlement can be achieved several ways such as:
- Reaching an agreement directly with your partner
- Negotiation and agreement using a third party such as us.
- Arbitration
- Court proceedings
When should I complete a Form E?
The sooner you complete your financial statement, the sooner you can begin the process of financial disclosure with a view to reaching a fair financial agreement.
How to complete a Form E.
A financial statement contains 5 main sections:
Section 1: this covers basic details such as names and addresses, information about the marriage or civil partnership, any children’s educational arrangements and any child maintenance being paid.
Section 2: this is the bulk of the form and concerns your present financial circumstances. You will need to supply the following information and documentation:
- for all the property you own either jointly or in your own name, up-to-date mortgage statements and evidence of its approximate value (such as an estate agent’s appraisal)
- for all your bank or building society accounts, the last 12 months’ statements.
- the current value of any investments in your name (shares, ISAs, unit trusts etc)
- details of life insurance policies and their surrender values
- details of any cash you have, in any currency, over £500.
- details of any personal belongings worth over £500 (e.g., cars, paintings, antiques etc)
- details of debts, such as credit cards, store cards and bank loans
- any actual or potential capital gains tax liabilities, e.g., on investment property or shares
- business assets—if you are a company director or in partnership, or run a business, you need to provide company accounts and various other documents.
- pension valuations— It is usually fine to take the details from your last statement, assuming that is less than a year old but if you do not have a recent statement then it is sensible to send the whole of this section also labelled 2.13 to your pension company and ask them to complete all the boxes and provide up to date information.
Regarding pensions, it is expected that you disclose all pension funds, no matter how small, even if you have not paid into them for several years. It is necessary to obtain an up-to-date valuation from the pension provider and this must be no more than one year old.
- details of your earned or self-employed income, with payslips and/or tax returns in support, along with any unearned income you receive (e.g., from investments) and any state benefits you receive, and
- details of any interests you have under a trust or any imminent inheritances.
Section 3: This is where you provide details of what you need in terms of income and capital for the future.
The income section requires you to prepare a future monthly budget so you can work out what you spend each month and how much you really need to live on. There are two sub-sections: one for you and the household, and one for any children living with you.
Section 4: This section requires you to explain any recent or imminent changes in your assets, set out your contributions to the marriage or civil partnership, the standard of living you enjoyed during your relationship, and any other relevant circumstances, so everyone has a complete a picture of your individual situation.
If you have remarried or are living with a new partner, you will also need to give details of your spouse or partner’s assets and income so far as you know them.
Section 5: This section asks you what you are seeking by way of a financial settlement.
Here is an example of a blank Financial statement for a financial order.
What documents need to accompany the Form E?
When filing the financial statement, you will need to submit accompanying documents. These documents serve as evidence/proof that the financial details you have disclosed are correct.
The documents that you will need to include are:
- Matrimonial home valuation
- Matrimonial home mortgage statement
- Valuations and mortgage statements of any other properties
- Personal bank, building society and national savings account statements.
- Details of other investments
- Life insurance policies
- Details of business interests
- Up to date Pension valuations
- Details of employment income & self-employment or partnership income
The final page of the financial statement contains a helpful checklist of the documents you will need to provide.
You have a duty to give full and frank disclosure of all your finances and other relevant circumstances in the financial statement.
Our tips for completing the Form E
- Start early – The document is very lengthy, and it may take some time to gather all the information or documents. Preparation and organisation are key.
- Get property and valuable possessions professionally and properly valued – Do not try to work out valuations yourself as they may be over or under valued. Always use an expert.
- Do not ignore pension assets. Make sure you include all relevant information concerning your pensions (not matter how small), such as the present value and expected future pay-outs.
- Make copies of any document requests you sent so you have proof that you have tried to obtain it they do not arrive in time.
- Contact companies for information – For example many pension companies will complete the relevant pension page of the financial statement for you.
- Be truthful and honest – You have the duty to give full and frank disclosure when completing a financial statement. This means you must provide accurate and true disclosure of all your financial and personal circumstances. Failure to provide full and frank disclosure of all financial information may result in an unfair settlement or could be considered dishonest, potentially resulting in legal ramifications. This could include any agreement being set aside, or criminal charges under the Fraud act 2006.
- Complete your financial statement as completely and accurately as possible. If in doubt, include it!
- Do not underestimate future financial demands. When completing your financial statement, consider both your immediate and long-term financial needs. This should cover housing, living expenditures, childcare, education costs, and any other financial obligations that may develop because of the divorce. If necessary, take expert advice from an IFA or Accountant.
Frequently asked questions
What if my financial circumstances have changed after I have completed and signed my financial statement?
Provided you update the other party (and the court, if proceedings have been commenced) of any changes to your financial situation then this will suffice.
Who needs to complete a Form E?
Both parties to a divorce or dissolution need to complete a financial statement with supporting documents.
Is a Form E the same as a Form D81?
The respective forms serve different purposes in the divorce process.
The Form E is normally used in the early stages of the divorce process when you are disclosing your finances and are beginning discussions and negotiations as to the division of assets.
The Form D81 is used once you have reached an agreement, and you are asking the Court to approve it, so it can be made legally binding on you both. A Form D81 also explains the practical impact of the proposed Consent Order on family finances and living arrangements.
You may therefore use both forms as part of the divorce process, but usually at different times. The information on a Form D81 may be different to that on a financial statement as the information provided on a Form D81 must be up to date and it could have changed since you completed your Form E’s.
Can I refuse to provide financial disclosure in a financial statement?
It is not mandatory to provide financial disclosure in divorce on a voluntary basis. However, a refusal to voluntarily provide financial disclosure will make any financial negotiations virtually impossible and is likely to increase conflict and costs.
Failure to provide voluntary financial disclosure is also likely to result in the matter proceeding to Court as part of Financial Remedy Proceedings. Once those proceedings are issued both parties will be compelled to provide financial disclosure as part of a strict Court timetable. If either party then fails to comply with the Court Order for financial disclosure, a Court may draw adverse inferences from that non-disclosure and punish the non-disclosing party by ordering them to pay costs. A Court can also set aside an Order it has made if non-disclosure is found.
If you wish a Court to approve a financial agreement you have reached in a Consent Order, both parties must provide a completed D81 form.
What happens after financial disclosure in divorce?
Following the exchange of financial statements it is open for either party to raise questions and queries on the financial disclosure. Once all outstanding questions and queries are dealt with, negotiations can begin with a view to achieving a financial settlement.
What are Form E capital needs?
These are your needs after the divorce or dissolution and can include what you need to buy a new home, a new car, furniture for your new home and removal expenses. Capital needs are usually one-off larger expenses.