When couples separate in Australia, one of the most important legal processes that follows is the division of property and finances. Whether you were married or in a de facto relationship, the Family Law Act 1975 (Cth) governs how financial matters are dealt with. A critical aspect of this process is financial disclosure—a legal obligation that ensures both parties are transparent about their financial position.
In this blog, we break down:
- What financial disclosure means in the context of family law in Australia,
- The relevant legal framework, including the Family Law Act 1975, and
- A practical guide on what documents and information you need to provide.
What is Financial Disclosure?
Financial disclosure is the process by which each party in a family law matter provides a full and frank account of their financial situation. This includes all assets, liabilities, income, expenses, and any financial resources they may have.
The primary purpose is to enable both parties—and the Court, if necessary—to have a clear picture of the financial pool available for division. Without full and honest disclosure, it’s impossible to reach a fair and equitable property settlement.
Why is it important?
- It ensures fairness and transparency in property and financial settlements.
- It helps both parties understand the total asset pool.
- It is a legal obligation under the Family Law Act 1975 after the commencement of the Family Law Amendment Act 2024.
- Failure to disclose can lead to serious consequences, including cost orders, adverse findings, or setting aside of a final property order.
The legal framework
1. The Family Law Act 1975 (Cth)
The Family Law Act 1975 is the primary piece of legislation that governs family law matters in Australia. It provides the overarching principles, considerations to be taken into account and the powers of the Court in dealing with property and financial matters.
Key principles from the Act:
- The Court must make property settlement orders that are just and equitable (s79 for married couples; s90SM for de facto couples).
- To achieve this, the Court needs to be fully informed of the financial circumstances of both parties.
- The Family Law Amendment Act 2024 (the Amendment Act) introduces significant changes to the Family Law Act 1975 notably what the Court will consider when determining your property settlement (now includes as a specific consideration the economic effect of any family violence where relevant) and codifies the parties duty of disclosure (s71B for married couples; s90RI for de facto couples).
2. The Amendment Act 2024
The new sections 71B (for married couples) and 90RI (for de facto couples) inserted by the Family Law Amendment Act 2024 became effective on 10 June 2024. Pursuant to these sections, legal obligations are explicitly imposed on parties involved in financial proceedings to provide full and frank and timely disclosure of their financial circumstances. The changes apply to new and existing proceedings, except where a final hearing has commenced.
Separating couples have a duty to give all relevant financial information and documents to each other and the court. The duty applies from when a party is preparing to start a property or financial proceeding and continues to apply once proceedings have started until the proceedings or until the matter is finally resolved.
The duty of disclosure includes and requires full and timely disclosure of all information and documents that are relevant. This includes:
- Disclosing all sources of income (including trust income, dividends, or capital gains),
- Disclosing any trust of which the party is the appointer or trustee or an eligible beneficiary as to capital or income,
- Listing all assets (e.g. real estate, vehicles, shares),
- Detailing all liabilities (e.g. loans, credit card debts),
- Revealing any disposal of property made in the 12 months prior to separation or since separation.
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You must provide this information even if the other party does not request it.
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The Amendment Act establishes an obligation on legal practitioners and family dispute resolution practitioners to make parties aware of their duty of disclosure and encourage compliance. They must inform the parties about the duty and the possible consequences if a party does not comply with the duty of full and frank and timely disclosure.
What do you have to disclose?
Disclosure obligations are broad and comprehensive. Below is a practical guide to the types of documents and information you are expected to provide.
1. Taxation Documents
- Tax returns for the past 3 financial years.
- Notices of Assessment from the Australian Taxation Office (ATO).
2. Income and Employment
- Payslips or income statements (at least the past 3 months).
- If self-employed: business activity statements (BAS), profit and loss statements, balance sheets, partnership agreements.
- Superannuation statements, including current balances and recent transactions.
3. Banking and Financial Accounts
- Statements for all bank accounts, savings accounts, offset accounts (personal and joint), covering at least 12 months.
- Credit card statements.
- Mortgage statements.
- Term deposits or investment accounts.
4. Assets
- Title deeds or valuations for any real estate you own or have an interest in.
- Registration papers and/or valuations for vehicles.
- Details of shares, bonds, cryptocurrencies, or other investments.
- Household contents (noting high-value items like antiques, jewellery, or artwork).
- Details of businesses, trusts, or companies in which you have an interest.
5. Liabilities
- Mortgage and loan documentation.
- Credit card debts.
- Personal loans.
- Business debts or guarantees.
- HECS/HELP debts.
6. Superannuation
- Statements for all superannuation funds.
- Defined benefit fund information (where relevant).
- If you are unsure of your fund, you can contact the ATO to track your super.
7. Trusts, Companies, and Business Interests
If you have any interest in a trust, company, or partnership, additional disclosure is required:
- Financial statements for the last 3 years.
- Trust deeds, company constitutions, partnership agreements.
- Minutes of directors' meetings.
- Tax returns and BAS.
8. Other Relevant Documents
- Prenuptial or Binding Financial Agreements (if applicable).
- Court orders or parenting agreements.
- Any property valuations or appraisals.
- Sale contracts or settlement statements from recent asset disposals.
When must you disclose?
Disclosure should happen as early as possible, before the first court event or during pre-action procedures. If you are engaging in mediation, arbitration, or negotiation, full disclosure should occur prior to discussions to facilitate informed decision-making.
Ongoing obligation
Your obligation to disclose is ongoing. This means if your financial circumstances change—e.g., you receive an inheritance, get a new job, or sell an asset—you must update the other side and the Court.
You cannot "pick and choose" what to disclose. Even if you think something isn’t relevant or isn’t in your favour, you are legally required to provide it.
Consequences of failing to disclose
Failure to comply with financial disclosure obligations is taken very seriously by the Court. Possible consequences include:
- Property settlement: The Court may take non-compliance into account in determining the property settlement.
- Defer or dismiss the proceedings: The Court may defer or dismiss all or part of the proceedings.
- Costs orders: You may be ordered to pay the legal costs of the other party.
- Set aside orders: Any agreement or court order made without proper disclosure may be overturned.
- Adverse inferences: The Court may assume that you’re hiding something unfavourable and make a decision against your interests.
- Contempt of Court: In extreme cases, failing to disclose may amount to contempt, leading to penalties.
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Tips for complying with financial disclosure
- Be organised: Keep digital or paper copies of financial documents.
- Act early: Don’t wait to be asked—be proactive in gathering and disclosing your information.
- Be honest: Always err on the side of disclosure. Trying to hide assets is likely to be discovered and punished.
- Get legal advice: A family lawyer can help you ensure your disclosure is complete and accurate.
- Use checklists: The Family Court and legal practitioners often use disclosure checklists. Ask your lawyer or search online for one.
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Alternative to court: disclosure in negotiation or mediation
If you are trying to resolve your matter outside of Court (e.g., through negotiation or family dispute resolution), the same rules apply. Full and frank disclosure is essential for reaching a binding agreement.
Often, a financial agreement reached outside court is formalised with:
- A Binding Financial Agreement, or
- Consent Orders approved by the Court.
In both cases, accurate financial disclosure underpins the fairness of the deal and its enforceability.
Final thoughts
Financial disclosure is not just a box-ticking exercise—it's a fundamental part of achieving a fair outcome in family law property matters. Under the Family Law Act 1975 and the Federal Circuit and Family Court Rules, all parties are required to disclose their full financial situation honestly and transparently.
By understanding your obligations and being proactive, you not only comply with the law but also pave the way for a more efficient, amicable, and fair resolution to your family law matter.
If you're going through a separation or divorce, seek legal advice early. Financial disclosure can be complex, especially where trusts, businesses, or hidden assets are involved. A qualified family lawyer can ensure that you meet your obligations and protect your interests.
