By Articled Student, Chyanne Sharma
Financial statements, whether in British Columbia Provincial Court or Supreme Court, are considered important and required in certain family law matters where a party is seeking an order for child support, spousal support or property division. They are sworn documents, like an affidavit, that provides the other party with information that outlines your income, monthly expenses, assets and debts (property), special or extraordinary expenses, undue hardship, and the income of other persons in the household. Preparing a financial statement can feel overwhelming which is why we’ve put together a simple guide to assist you with your family law matter.
When do I Need a Financial Statement?
If your family law matter involves child support, spousal support, and property division, then you will be required to complete a financial statement in British Columbia. In Provincial Court, financial statements are referred to as “Form 4 Financial Statement” and in Supreme Court, they are referred to as “Form F8 Financial Statement”. While these documents are typically relied on in matters that are being pursued through the court process, they can still be useful to prepare if you were to resolve your family law matter through an alternate dispute resolution such as mediation.
Sections of a Financial Statement
To start, the financial statement forms are complete with instructions and can be accessed online directly through the court websites or you can go into your nearest courthouse and obtain a paper copy. It is best practice to focus on each part individually which will make it easier to complete. Remember, always be truthful when drafting any court document. A person that is a party to a family law matter has a duty to make full financial disclosure to the other party and to the court – especially where one party has relevant information that is unknown to the other. Failure to do so may lead to negative financial consequences, so it’s best to always disclose all relevant financial information that you are aware of.
Financial statements are broken down into five parts for Provincial Court and six parts for Supreme Court. The following is what you’ll need to include under each section – they won’t all apply to you so be sure to check which sections you have to complete.
Under this section, use your most recent tax return (T1 General) to determine your relevant income and any adjustments. Start off with your total annual income which you can find at line 15000 of your most recent tax return. If you anticipate that your income will likely remain the same in the current year, you can rely on last year’s income tax. If you anticipate a change in your income, you will need to disclose that information. Next, work your way through the rest of the section, you’ll notice that the form allows you to enter any adjustments or additions that may or may not be applicable as a source of income for the purposes of calculating child or spousal support payments.
Under this section, you want to show the courts all the things that you spend money on annually and monthly – you may not have an exact number, so close estimates are acceptable as long as you are truthful and do not exaggerate your expenses as you will be required to show proof of how you can pay for things. The financial statement itself will break down the relevant expense that you will need to disclose, for example: housing, food, transportation, clothing, children’s expenses, medical expenses, and personal care items.
3. Assets and Debts
Under this section, you will want to show your debts (the money that you owe someone or an expense that you have a responsibility to pay i.e. a mortgage or loan) and your assets (something that you have that holds value i.e. property, bank accounts, pensions, stocks, jewelry, etc.). You will want to list out everything that is in your name solely, and/or jointly with any other person such as your ex-partner or a family member – while it may be hard to determine the exact value of certain assets, you can still disclose how much ownership you have in an asset. You must also include any assets that are not located in British Columbia. Again, you will be required to show proof of your asset or debt, or how you determined the value of a particular item and it is best not to exaggerate any monetary value. If you disposed of any property in the last two years, you will be required to complete that section in your financial statement and disclose if you’ve made any money from the sale of the asset.
4. Income of Other Persons in Household
If you’ve entered into a new relationship or marriage and their income contributes to the expenses that you’ve identified in your financial statement, then you are required to disclose all sources of their monthly and annual income under this section of the financial statement.
5. Undue Hardship
Sometimes the amount of child support that you are required to pay under the Federal Child Support Guidelines, taken into consideration of your full financial picture, may create undue hardship for an individual. When this happens, you can ask the courts to make a child support order for an amount that is different than the guidelines. There are certain situations in which a person may want to claim undue hardship, such as:
- they are in a lot of debt from supporting the family before separation
- it costs a lot to be able to spend time with the child(ren) (for example, travel costs)
- they have to make other support payments for an ill or disabled person
- they must make other support payments for a child from another relationship
6. Special and Extraordinary Expenses
When making a claim for child support, you may have heard the term “special and extraordinary expenses”, also known as Section 7 expenses. These are expenses that are in addition to the amount required to pay in accordance with the Federal Child Support Guidelines. You will want to list out the total costs for expenses such as:
- medical or dental premiums that provide coverage for your child, or costs that are not covered by your insurance
- post-secondary expenses such as tuition
- extra-curricular activities
Once you are done filling out your financial statement, you will be required to attach certain documentation at the end of the document that support your claim. This includes the following:
- Your T1 Generals for the three most recent years
- Your Notice of Assessments and any Reassessments, if any
- Your 3 most recent paystubs
- Proof of income from any other source, including any government or social assistance
- If you own a corporation then you must include your three most recent corporate financial statements
- Your three most recent corporate T2 Generals
- Your three most recent corporate Notice of Assessments and Reassessments
- If any properties are involved, a copy of the most recent BC Assessments (important: this applies only to Supreme Court Financial Statements).
Filing with the Registry
Once you have completed your financial statement with your attachments, you will need to have your statement sworn with a commissioner (a court appointed professional who can swear oaths and affidavits - registry clerks, lawyers, paralegals, or notaries can assist you with this) and make 4 copies for Provincial Court and 3 copies for Supreme Court. Then you will file your document and copies at the registry and serve the filed financial statement to the opposing party in your matter – or their lawyer if they have retained one.
Completing court forms on your own, especially financial statements, can feel like an overwhelming and daunting task. If you would like more information on how to complete a financial statement or would like the assistance from one of our certified legal coaches or paralegal navigators, contact our team at Coach My Case today for a free 20-minute consultation on how to get started. If you want more information on why disclosing your assets is important, read our helpful blog here.