How to Prepare a Form E
What is a Form E?
When a marriage has broken down irretrievably, both parties are required to provide full and frank financial disclosure so that a fair settlement can be reached in relation to the matrimonial assets.
This is usually achieved by completing a financial statement known as a Form E. This is usually the first step of the financial claims procedure. This piece of disclosure allows parties to set out their full financial details in a comprehensive format while providing clearly identified supporting documents which verify this information. It also allows you to include any needs you may have for yourself or your children. Advice is often required on how to prepare a Form E; this article sets out some informal guidance.
Why is the Form E so important?
The Form E should be seen as an important opportunity to positively progress your case. It can be tempting to be as brief and scant as possible in a Form E; this is not recommended. A poorly completed Form E can lack vital information and have the effect of raising suspicions that one party is trying to hide assets. This not only increases acrimony between the parties but can also lead to lengthy and detailed requests for further information which waste both time and legal costs. In contrast, a properly completed Form E provides an opportunity to put across your full side of the story and reach a much swifter settlement, at the FDR hearing or beforehand through early negotiations.
What needs to be included?
I will now take you through a very general look at the financial disclosure sought within a Form E and explain what is required when completing the sections in relation to them.
The first section of a Form E addresses any assets that you may hold in relation to property. Here you are required to provide any interest you hold in the stated property and what percentage of the property you own. You must also provide details in relation to any mortgages and a realistic estimate of the properties current market value. It is vital to provide supporting information here in the form of an up-to-date mortgage statement and, if possible, a valuation of the property obtained in the last six months. The value of a property is often a sticking point in proceedings so unless both parties fully agree on a market value then getting this sorted promptly is beneficial in the long run. If you jointly own a property, and have not agreed what share of the property you hold with your spouse, it is sensible to put your share as 50% of the net value.
2. Bank details
All bank accounts, savings accounts and building society accounts held over the previous 12 months, whether solely or jointly, must be included in the Form E. These must be accompanied by statements for all accounts covering the full twelve-month period. Failure to list all accounts and provide full statements is a common mistake when compiling a Form E. If bank accounts are jointly owned with a husband or wife, you should put 50% of the figure in the account in the relevant box. Don’t include credit cards in this section.
These include assets such as PEPs, ISAs, TESSAs, National Savings, bonds and stocks. All investments must be disclosed including their current value and the value of your interest. You must also provide the last statement or dividend voucher in relation to these. Again if these are jointly owned, put 50%.
All life insurance policies including those without a surrender value must be listed. You must also include a surrender valuation to any policies where this is relevant.
Parties must include details of all money owed to them as well as providing details of any cash sums held in excess of £500. Belongings (chattels) worth over £500 must also be included. These include items such as cars, paintings or jewellery. It is good practice to provide valuations for these items (the included value should be the sale value).
You should disclose any debts that you owe, including loans to be repaid. You should also include potential Capital Gains Tax liability on the sale of assets. Providing supporting documentation including loan agreements can often save further questions which would be likely to arise in a questionnaire at a later date.
7. Business assets
Details of all your business assets must be provided within a Form E. Included within this section is the requirement that parties must disclose business accounts for the previous two financial years and any document that values their interest within the business. If you are a business owner, it is sensible to include a valuation of the business, if one is available. It is not recommended to incur costs obtaining a valuation at Form E stage, as if a value cannot be agreed, an independent expert valuer may be instructed at a later date.
Full details of all pensions must be provided within a Form E together with a cash equivalent value. If a valuation is not available, then a letter to the pension company must be attached detailing when this value will become available. Pensions are often an important matrimonial asset and having this information to hand early can save considerable delay later on in proceedings.
You must declare all income sources when compiling your Form E whether in relation to employment or investments. For PAYE employment, you must provide your last three payslips as well as your P60 for the last financial year. You must also provide your last Form P11D if relevant.
10. Income Needs
Parties are required to set out a schedule of their monthly or annual income needs within their Form E. These include needs for both yourself and any children of the marriage. Parties must include capital needs that may be required post divorce. Examples of capital needs could be the sums required to purchase a new property, a car, furnish a property or purchase white goods.
Although a Form E can appear daunting on first viewing, it goes through your assets in a methodical way and provides an excellent check list as to which documents you need to provide in support. It also allows the exchange of clear evidence in relation to finances and if done properly can expediate the divorce process. This article is meant as a guide and not definitive advice on the requirements for a Form E. It is always recommended to seek legal advice if preparing a Form E and our team of solicitors are readily on hand to assist.
For assistance with preparing your Form E or advice on any aspect of the financial disclosure process, please contact us for a confidential advice at [email protected] We offer video link consultations to assist with the preparation of financial disclosure.