Family Law: Form 8 Financial Statement: Purpose and Use
Providing financial disclosure in the course of a Family Law dispute can be overwhelming. This post is meant to be a brief guide on how and why you should complete the Form F8 Financial Statement (“F8”), and to address some common questions.
What is the F8?
The F8 requires you to be open and honest about your finances so that each party in a family law dispute, your lawyers, and the Court may know the starting point for negotiations and orders.
The F8 is a sworn document, meaning that being dishonest in completing it has the same consequences as lying under oath. Carelessness and inaccuracies in the F8 will reflect poorly on your credibility and may result in unfavorable treatment by the Courts. Many of the main issues in a family law dispute revolve around financial support and division of property, so a complete and accurate F8 is integral to resolving your dispute in an efficient, fair, and cost-effective manner.
The Supreme Court Family Rules require each party to exchange an F8 and supporting financial documents within 30 days of either commencing a Family Law action (for the Claimant) or from being served with a Notice of Family Claim (for the Respondent).
The F8 is divided into six parts:
1) Part 1: Income
2) Part 2: Expenses
3) Part 3: Property
4) Part 4: Special or Extraordinary Expenses
5) Part 5: Undue Hardship
6) Part 6: Income of Other Persons in Household
Page 2 of the F8 indicates which parts to complete based upon the claims that are being made. It is important to refer to your financial documents while completing the F8. Categories like expenses and income may be difficult to ascertain, but it is important that you do not guess based on what you think your finances might be.
General Tips for Completing the F8:
Income for Those who are Self-Employed:
Arriving at your net income amount may be difficult. Some expenses, such as gas, cell phone, meals with clients, and a portion of your utilities or mortgage may be expenses that should be deducted from your gross income but not listed in Part 2 of the F8. You may wish to consult with your lawyer and accountant in completing this section.
Record what you actually spend. The relevant information is not what you would like to spend, or how much you used to spend before the separation. Put in your current expenses without embellishing.
If you share household expenses with another person, for instance, if you have remarried, are living with a new partner, or have a roommate, do not list the total combined amount; only record your share of the household expenses that you actually pay.
Periodic expenses should be divided to arrive at your monthly amount. If you pay some expenses annually or biannually, such as car insurance or property taxes, divide the total by 12 or 6 to come to the monthly amount.
Record expenses incurred or reasonably anticipated for the year. Some expenses, such as re-roofing or tree trimming, happen less often than once a year. If the expense arose this year, include it in the F8. If you re-roofed your home last year, then do not use that expense as an estimate of this year’s house maintenance costs, because it will not be repeated this year.
List all of the assets that you own, either solely or jointly with someone else (identify the co-owner of the property and the extent of their interest). Include assets that your spouse will not make a claim against, those that are located outside of Canada, those that you have acquired since the date of separation and those that your spouse does not know about.
You must list all of the assets that you have disposed of, including by sale or by gift, in the 2 years preceding the application. This includes assets that you owned independently of your spouse, dispositions that your spouse consented to, and assets that your spouse did not know about.
Debts should be listed in this section. A mortgage is considered a debt, and loans from friends or family should be included as well.
Changes in Circumstances:
The F8 is mostly based on information and documents from the recent past. The F8, therefore, provides a snapshot of a particular time in your financial life. If you anticipate any changes in circumstances in the near future, such as a promotion, your children moving out of your home, a change in pension income, etc., this should be listed on page 3 of the F8.
Parts 5 and 6: Undue hardship and Income of Other Persons in the Household
These sections are relevant in very particular circumstances. If you are unsure of how to complete these sections and how they apply to your situation, you may wish to consult a lawyer.
Consequences of Insufficient, Dishonest, or Lack of Disclosure:
A Court has the discretion to set a party’s income for the purposes of calculating child and spousal support if they feel that insufficient disclosure has been made. If a Court imputes a party’s income in this manner, the result could be an order for a higher amount of support than what would have been made if the party had disclosed their income.
Lack of financial disclosure at the time of the creation of a separation, co-habitation, or marriage agreement is grounds to set these agreements aside. If your agreement regarding how to divide assets is set aside, the Court has the discretion to divide the family property between the parties according to the property and support regimes in the Divorce Act (Canada) and the Family Law Act. Full and honest disclosure is, therefore, key to creating an enforceable agreement.
Finally, inaccurate disclosure can increase your legal costs by dragging out negotiations and by requiring your lawyer to continuously clarify and revise your documents.