Why Are Forms E Important and How Do You Complete One?

Introduction

When separating from your spouse or partner, one of the most challenging aspects is knowing how to resolve the division of finances.

To ensure this process is fair, and any financial agreement/settlement is reasonable, there should be a mutual exchange of financial disclosure. The courts will direct separating couples to do this using a document called a Form E; but Forms E are also increasingly being used by separating couples outside the court process i.e. those using mediation, and other forms of dispute resolution, as it is helpfully structured into categories, breaking down capital and income resources, which makes finances easier to review and understand.

In this article, we will explain why Forms E are so important and provide guidance on how to complete them, and things to look out for.

Why Is a Form E Important?

Forms E are a financial statement that each party in divorce or dissolution proceedings are directed to complete when seeking a financial order through the courts. If not in proceedings, i.e. discussing a financial agreement directly with your spouse or partner, or when engaging in mediation, arbitration, or other forms of alternative dispute resolution, Forms E can still be exchanged (known as ‘on a voluntary basis’) to help visualise the full financial picture and therefore provide a helpful guide to be able to reach a fair settlement through discussion/negotiations.

So why is a Form E so important:

1. Requires Full & Frank Disclosure: Both parties are expected to disclose all their personal assets, income, and debts, whether in their sole name or joint names with their spouse/partner (or another third party). In addition, disclosing their current and anticipated expenses (income needs) and capital needs.
   If there are any assets/resources that one party seeks to challenge (i.e. that it is ‘non-matrimonial’, a post-separation purchase etc.) it all is included within their form E.
   This means each party is able to comprehend the other’s financial position, and therefore the wider financial picture as a whole; as well as any potentially disputes or hurdles to overcome to reach a final agreement, right from the beginning.
2. Informed Decision-Making: Having received full and frank financial disclosure from your spouse or partner, you will be able to see the full financial picture. This ensures that when negotiating a financial agreement about how assets etc. should be divided (including property, savings, pensions, business assets, and even future spousal and child maintenance considerations) it is done from an informed position giving you that surety that the agreement reached is fair and reasonable in all the circumstances.
3. Serious Consequences for Inaccuracy: Every form E is signed with a ‘statement of truth’, that the person completing the form has given “full, frank, clear, and accurate disclosure of their financial and other relevant circumstances”.
   If a Form E is inaccurate or incomplete, this can lead to unnecessary delays, and increased legal costs. Where inaccurate information directly leads to an unfair financial settlement, these can sometimes be set-aside.
   Proceedings for contempt of court can even be brought against a party who has deliberately hidden information, lied on their form E, and/or otherwise made a false statement of truth, and/or criminal proceedings for fraud. The penalties can include a fine, imprisonment, and having assets seized.
   It should be noted that where a person has completed their form E to the best of their knowledge, and at a later date they realise something needs to be corrected, so long as they comply with their duty to provide full and frank disclosure by informing the other party (and the court) at the earliest opportunity after realising a genuine error; it is unlikely proceedings for contempt of court and/or fraud would be brought.

Key Sections of a Form E

• Personal Details: Basic information about yourself such as your name, date of birth and address, dates of your marriage/civil partnership and separation, and any children (if applicable).
• Assets: real property (including the family home), savings, investments, businesses, trusts, vehicles, and valuable personal belongings. This includes assets in your sole name or joint names with your spouse/partner (or any other third party). It also includes any assets in England & Wales or worldwide.
• Debts and Liabilities: Outstanding debts such as mortgages, loans, HP/PCP agreements, and credit cards. Again, these are whether in your sole name or joint names with another person.
• Income: From all sources, such as salary/wages, rental income, pension income, investment income, trusts, and/or benefits.
• Expenditure: Details of your current day-to-day living costs, from household bills to personal expenses, as well as those of any children under the age of 18 who may be living with you, and an estimate of your future financial needs.

Step-by-Step Guide to Completing a Form E

Completing a Form E can be daunting at first; but remember that not all sections will necessarily apply to you and can be marked as ‘N/A’ (it is designed to be a ‘catch all’ form) therefore breaking the form down into more manageable steps can make the process easier.

Below is a simple guide to help you:

1. Gather Your Financial Documents: Before starting, make sure you have all necessary paperwork to hand, or know where to find them. Each section of the form E stars with a grey box titled ‘documents required for attachment to this section’ so it is worth checking these to ensure you are providing everything you need.
   The main documents to disclose include 12 months of bank statements for every bank account, statement of savings/investments, a recent estate agent’s valuation for a property, a recent mortgage statement, 3 months of payslips and/or 2 years of tax returns, a recent pension valuation.
   Tip: we recommend requesting a valuation from your pension provider(s) as soon as possible as these can take time to arrive, and you can work on the rest of your form E while you wait.
2. Fill In Details About Your Assets: go section by section and provide details about each of your assets, including any jointly owned items. Ensure you provide up-to-date valuations/evidence to support the values you’re giving to your property, cars, and other valuable items etc. – see above.
3. List Your Debts and Liabilities: try to be thorough when listing any outstanding debts, from mortgages to personal loans and credit cards, and loans from family members. It can be helpful to provide a copy of a recent statement/evidence for each debt where you can; even though the form E doesn’t ask you do this (as it can save you time and legal costs if your spouse/partner doesn’t have to seek this evidence at a later date where there is a question about it).
   Details about Your Income: This is income from all sources (including earned income/wages, rental income, pension income, investment income, trust income, and/or state benefits. You will also need to submit supporting evidence for each source of income, such as recent payslips and tax returns (see above).
4. Break down Your Expenditure: This should be a realistic account of your day-to-day living expenses, including utility bills, food, household expenses, clothing, restaurants, work expenses etc. and costs for any children, as well as anticipated future expenses. It can be helpful to go through your bank statements to see what you spend each month on each service/product if you’re unsure what amount to put in your budget.
5. Pension Disclosure: Include details of any pension schemes you belong to. This is crucial, as pensions can be a significant asset for one or both parties.

Common challenges and how to overcome them

Completing a Form E is not always straightforward; so below are a few common challenges people face and some tips on how you can address them:

• Valuing Complex Assets: If you have business interests, investments, Trusts, and/or some pensions (such as a public sector pension), it may be difficult to accurately assess their true value. In these cases, you may need to consider obtaining a professional valuation; which can be done jointly with your spouse/partner.
• Missing Documentation: If you are unable to find certain documents, such as old bank statements or pension details, try requesting replacements from your bank or scheme provider. If you are still unable to evidence these documents, be open about this within your form E, explaining the situation and what steps you’ve taken to try to resolve the issue.
• Estimating Future Needs: It can be hard to predict upcoming costs. Base your estimates on current circumstances, by reviewing your bank statements for examples; but do allow some flexibility for potential changes, such as inflation, and especially if child arrangements are likely to change going forwards.

How we can help

Completing a Form E correctly is important, and mistakes can lead to delays/ issues later down the line and hold up reaching a financial agreement. Here is how we can assist:

• Expert Guidance: A solicitor can help you complete your form E or review your draft Form E, to ensure it is filled out as accurately as possible. They can spot any potential gaps in your information / evidence and advise you on areas that may need further clarification or supporting documents.
• Strategic Advice: A solicitor can help ensure that the information you provide in your Form E supports your position and/or your overall goals, during financial negotiations, whether that is in court or through mediation.
• Avoiding Costly Errors: Incomplete or inaccurate forms can cause delays and result in additional legal fees. A solicitor can help you avoid these issues and often streamline the process for you.

Form E is a vital document, ensuring that financial settlements are fair and reasonable, and giving both parties an equal negotiating power. While the form can initially seem complex, careful preparation and obtaining legal guidance can make the process smoother.

If you would like help completing your Form E or you have questions about the financial aspects of your divorce or separation, please contact our specialist Family Lawyers on 0330 822 3451 or request a callback. Our experienced Family team can guide you through every step of the process, ensuring your financial interests are protected. 

The author of this blog is Lia Gosai, a Legal Assistant in our Family Law team.