Jennifer Lopez and Ben Affleck, affectionately named "Bennifer", are the subject of newspaper headlines once again after "Bennifer Divorce".
After marrying in 2022, J-Lo has now filed for divorce following months of Hollywood rumours. Whilst journalists will be delving into the reasons why, as Family Lawyers that is not our place – especially in England and Wales following the introduction of no-fault divorce. What does pique our interest, however, is the duty on Ben and Jennifer to provide financial disclosure to one another (that, and the seeming lack of a pre-nuptial agreement).
What is financial disclosure?
Financial disclosure is the sharing of financial information, including about properties, other capital, income, expenses and debt. In financial remedy proceedings, the duty to provide full and frank financial disclosure is ongoing, meaning that each party is obligated to provide updating information until such time as a settlement is reached. This duty does not stop at the point of separation, therefore.
Even if a settlement is to be considered outside of court, an exchange of financial disclosure is necessary to ascertain the financial landscape and determine the best route to resolution. A solicitor will not be able to advise you on your financial arrangements until disclosure has taken place and, indeed, a Judge will not approve of any financial order until they have a basic understanding of the finances which underpin that agreement.
How does financial disclosure work?
Financial disclosure can take many forms. The standard approach is for spouses or civil partners to exchange a document called Form E, which is the document used by the court in Financial Remedy proceedings. This multi-page document takes parties through the information required of them and sets out the supporting documentation which should be provided alongside. This includes 12 months' worth of bank statements for each account, pension valuations and tax returns.
In certain circumstances, it may be appropriate to agree a pared down form of disclosure, such as schedules of financial information or limited supporting documentation. In mediation, parties might not see the other's financial documentation, and instead the mediator will draw up a financial statement for them to work from in their negotiations.
In Bennifer's case, J-Lo has been given 60 days to file her financial information, with Ben given a further 60 days after that to provide his corresponding evidence. In England and Wales, however, financial disclosure is usually exchanged, meaning that the parties send their financial information to one another at the same time. This can be on an agreed date, if discussions are taking place outside of the court. If financial remedy proceedings are underway, there will be a set date for financial disclosure to be provided (with further dates for updating disclosure before each hearing). Failure to adhere to this date or provide adequate disclosure, can result in sanctions from the court.
The Millionaire's Defence
If one party is extremely wealthy, they may ask the court to rely on the "millionaire's defence". This is an exception to the rule of providing full and frank financial disclosure, on the basis that the party has the means to afford any order made against them without the need to delve deeper into the nuances of their finances.
This "defence" is rarely successful upon divorce or dissolution, where the presumption is that the other party is entitled to an equal share of the matrimonial assets. This can, of course, only be determined once the true extent of those assets is known.
That said, the "millionaire's defence" might be appropriate in cases where the other party's claim is limited solely to their needs. For example if it has been a short marriage, there are substantial pre- or post-marital assets or a nuptial agreement had been entered into.
In the case of AH v PH in 2013, all of the assets, amounting to some £76m, were non-matrimonial, meaning they had not resulted from or within the marriage. The husband, who held these assets, confirmed that he would be able to meet any reasonable order. The court found that the parties' four-year marriage was short and, as such, moved away from the presumption that assets should be shared, limiting the wife's claim to her reasonable needs. On this basis, the Judge allowed the husband to provide just a broad outline of his wealth, without providing full and frank financial disclosure, under the 'millionaire's defence'.
If you are separating from your spouse or civil partner, you are entitled to full and frank financial disclosure and are obligated, in the majority of cases, to provide the same. If you would like to discuss this, or a financial settlement more generally, contact the Family Team at Stephens Scown who can advise you on your options.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.