How Are The Financials Handled In A Divorce?
Divorce will generally entail the division of finances and assets of the parties. Sorting out finances can be one of the most daunting aspects of a divorce, not only because this can be quite complex depending on the nature of the assets of the parties, but also as each individual is going through the emotional process of separation, which is an understandably difficult and delicate time.
In the Family Court, once a Divorce Petition is filed, the division of assets begins with the submission of a legal document called the “Form E”. The Form E sets out each individual’s respective financial position. Each individual is required to give information on the following:-
- Assets – matrimonial home, bank accounts, shares in companies, stocks and bonds, insurance, mandatory provident fund and trust interests;
- Liabilities – credit cards debts, loans;
- Income – monthly income, government allowances, benefits in kind; and
- Expenses – currently monthly expenses and anticipated future expenses.
Each party has the duty of full and frank disclosure when filling out their Form E, which is also verified with a signed statement of truth. Each party must be honest and disclose their financial position fully. This includes disclosure of assets located outside of Hong Kong, together with supporting documents such as bank statements, credit card statements and tax statements, mortgage and loan documents and any other relevant financial documents.
The Family Court then sets a date for a First Appointment Hearing. This is a hearing in which the Court will direct the individuals on how to proceed with the divorce application. Form Es are exchanged with your spouse not less than 28 days before the First Appointment Hearing.
Once Form Es are submitted and exchanged, each individual can then work out whether they need further information and/or supporting documents from their spouse. An individual can request more information and/or supporting documents through a legal document called a “Questionnaire to Form E”, setting out specifically what information or document is missing, or reasonably questioning issues that arise from the disclosure given in their spouse’s Form E.
The Questionnaire then needs to be provided to your spouse no later than 14 days before the First Appointment Hearing. At the First Appointment Hearing, the Court will usually direct the spouse to submit a legal document called “Answer to Questionnaire” after the hearing to answer the questions raised and/or to provide the supporting documents requested in the Questionnaire.
The shared web of finances built throughout a marriage no doubt complicates a divorce. However, there is no escape from dealing with the division of assets and you should seek advice from a lawyer on asset division as soon as possible and perhaps even engage a financial planner to organise your finances and assist with the preparation of your Form E.
