Dividing property after the breakdown of a marriage requires each spouse to provide an accurate picture of their finances.

That process becomes much more difficult when one person suspects that money, investments, property or other assets are being concealed.

A spouse may discover an unfamiliar bank transfer. A business owner may suddenly report much lower income. An investment account that previously appeared on financial records may seem to have disappeared.

According to Manjeet Kaur, a Brampton family lawyer and founder of Kaur Family Law, complete financial disclosure is an important part of resolving property and support issues after separation. When information appears to be missing, there are legal tools that may help uncover the true financial picture.

Why Does Financial Disclosure Matter?

Ontario family law generally requires spouses to provide financial information when resolving issues such as property division and support.

For married spouses, property division is usually addressed through the equalization of net family property.

Each spouse identifies assets and debts at relevant dates and calculates their net family property. The difference between the spouses' net family properties can result in an equalization payment.

An accurate calculation depends on accurate information.

If significant assets are missing, the resulting settlement may fail to reflect what a spouse is legally entitled to receive.

Financial disclosure can also affect child support and spousal support.

What Assets Might Be Hidden?

Attempts to conceal wealth can take many forms.

Depending on the circumstances, concerns may involve:

• Undisclosed bank or investment accounts
• Cryptocurrency
• Cash
• Real estate
• Corporate assets
• Shares in private companies
• Valuable personal property
• Income diverted through a business
• Money transferred to relatives or other third parties
• Assets located outside Canada

Some discrepancies have innocent explanations. Others may require further investigation.

The goal is to determine what property exists, who owns it and what it is worth.

How Can Hidden Assets Be Discovered?

Financial disclosure provides a starting point.

Spouses may be required to exchange documents such as income tax returns, notices of assessment, bank statements, investment records, pension information and details concerning debts and property.

Business owners may need to provide additional corporate information.

Lawyers can compare records for inconsistencies.

For example, tax returns might report investment income from an account that was not disclosed. Bank statements could show transfers to another institution. Corporate records may reveal payments or assets that require further explanation.

In more complicated cases, accountants, business valuators or forensic professionals may assist with tracing funds and determining the value of assets.

What If a Spouse Refuses to Provide Documents?

A spouse cannot necessarily avoid financial disclosure by simply refusing to cooperate.

If a family law case is before the court, judges have tools available to address inadequate disclosure.

Depending on the circumstances, a court may order a party to provide specific documents or information. Failure to comply with disclosure obligations can lead to financial consequences, including cost awards.

Persistent non-disclosure can also damage a person's credibility.

Courts need reliable financial information to make decisions about property and support. A pattern of withholding information can become an important issue in the proceeding.

What About Transferring Money Before Separation?

A spouse may sometimes move or dispose of assets before the property issues have been resolved.

A transfer is not automatically improper. People regularly move money, sell investments and make financial decisions for legitimate reasons.

The timing, purpose and circumstances surrounding the transaction matter.

Ontario's Family Law Act provides remedies that may become relevant when a spouse has intentionally or recklessly depleted their net family property.

A lawyer can examine financial records and determine whether unusual transactions may affect the equalization calculation or justify further legal action.

Can a Settlement Be Reopened If Hidden Assets Are Found Later?

Financial disclosure remains important when spouses negotiate a separation agreement.

A settlement based on incomplete or misleading financial information can face legal challenges later.

Ontario's Family Law Act allows courts, in certain circumstances, to set aside provisions of a domestic contract when a party failed to disclose significant assets, debts or liabilities that existed when the agreement was made.

This is one reason proper disclosure should take place before a final agreement is signed.

Trying to resolve matters quickly without understanding the complete financial picture can create much larger disputes later.

What Should You Do If You Suspect Hidden Assets?

Start by preserving the financial information you already lawfully possess.

Bank statements, tax documents, mortgage records, corporate information and previous financial statements may help identify discrepancies.

Avoid accessing accounts or records that you are not legally entitled to access.

A family lawyer can help determine which documents should be requested and what steps may be available if the other spouse refuses to provide them.

The earlier unexplained financial activity is identified, the easier it may be to investigate.

Financial Transparency Matters After Separation

Property division relies heavily on disclosure.

When a spouse conceals significant assets or provides misleading financial information, it can affect settlement negotiations, equalization and support.

Unusual transactions do not necessarily prove wrongdoing. They may, however, justify closer examination before a final agreement is reached.

Manjeet Kaur is the family lawyer leading Kaur Family Law. The firm assists clients in Ontario with separation, divorce, property division, financial disclosure, support and other family law matters.