My Spouse Is Hiding Money or Assets During Separation in Ontario

Many people reach separation with a sinking feeling that the numbers do not add up: income that seems lower than it should be, accounts you have never seen, or a spouse who becomes suddenly vague about money. Suspicion alone is not proof, but Ontario's process has ways to require disclosure.

This article explains the disclosure duties, the tools used to compel information, and what can happen when someone hides assets. It is general information only, and a lawyer can assess your particular facts.

What each spouse must disclose

When a case involves child support, spousal support or property, financial disclosure documents are needed. In court, each side completes a commissioned financial statement: Form 13 where only support is claimed, and Form 13.1 where property or debts are claimed. A Certificate of Financial Disclosure (Form 13A) also applies to support or property claims.

In a proceeding under the Divorce Act, the parties also have wider duties, including to give complete, accurate and current information when the Act requires it and to comply with orders. In divorce cases, the Divorce Act also requires legal advisers, unless it is clearly inappropriate, to raise reconciliation and encourage family dispute resolution, and to certify compliance in filed documents.

Signs worth documenting

If you suspect something, write down what you have noticed and why, rather than confronting your spouse. Details help a lawyer decide what to request.

• Income on a financial statement that does not match lifestyle, past tax returns or business activity
• Accounts, investments or loans mentioned in old mail or statements but not disclosed
• Large recent transfers, gifts or repayments to relatives or friends
• A business that suddenly reports lower profits or pays the owner less
• Unexplained changes to property ownership, or new debts that appear shortly before separation
• Reluctance to provide tax returns and notices of assessment

Do not break into accounts, devices or email to look for evidence. How you obtain information can create its own problems, so ask a lawyer before acting.

How disclosure can be compelled

In most family cases, the steps are the Mandatory Information Program, a first appearance (in Family Court branches, except for divorce, property or arbitration award cases), a case conference, a settlement conference, and then trial scheduling and management conferences. The case conference brief is limited to 8 pages and the settlement conference brief to 12 pages.

If voluntary disclosure is not happening, a motion can be brought using Form 14 (Notice of Motion) and Form 14A (Affidavit). The specific orders a court can make about missing disclosure depend on the facts and the rules, so a lawyer can explain which requests make sense in your case.

Consequences of hiding assets

The consequences can be serious. A court may refuse to enforce a separation agreement if a party did not fully disclose financial information. A court may also set aside a domestic contract, or a provision in it, if a party failed to disclose significant assets or significant debts or liabilities existing when the contract was made.

That said, it is a two-stage process. The applicant first has to prove a listed ground applies, and then the court decides in its discretion whether to set the contract aside, with fairness a consideration. A breach does not automatically void the contract.

In child support matters, failing to disclose a material increase in income is treated as blameworthy conduct and can move back the date from which retroactive support is ordered. Non-compliance with a court-ordered parenting arrangement can lead to a fine or jail.

What to do next

• Do not sign a separation agreement until you are satisfied you have seen the financial picture. Each party should get independent legal advice before signing.
• Gather the records you already have, such as tax returns, statements and mail.
• Keep a dated list of what you suspect and why.
• Watch deadlines. The time limit to go to court over equalization is six years from the day of separation, or two years from the day the divorce is final, whichever comes first.
• If you have already signed an agreement and later discover hidden assets, speak with a lawyer promptly, since an agreement cannot easily be changed later.

Frequently asked questions