# Why Hiding Information During a Separation Can Come Back to Haunt You

By Megan Santano


 


Why Hiding Information During a Separation Can Come Back to Haunt You


When separating spouses negotiate a property settlement, there is often a temptation to focus solely on getting a deal done. But as a recent British Columbia Supreme Court decision demonstrates, withholding important information can have serious consequences, even after an agreement has been signed.





In In v. In, 2026 BCSC 1424, the Court reinforced a fundamental principle of family law: separating spouses owe each other a duty of full and honest financial disclosure when negotiating a separation agreement. A deal reached without that disclosure may not be worth the paper it is written on.





Scenario





Imagine this.





You and your former spouse own a home together. You're separating and want to avoid a lengthy court battle.





You and your former spouse obtain an appraisal of the family home, which shows it is worth $500,000.00. Based on that value, you both agree that you will keep the house and buy out your former spouse's half interest for $250,000.00. You take the agreement to your lawyer to draft up.





Several months go by and, before the agreement is signed, you speak with the bank about refinancing the property and using the refinancing proceeds to complete the buyout of your former spouse's interest. You learn that the property has gone up in value and is now worth $600,000.00.





You don't mention this information to your former spouse or your lawyer. You think that, since you’ve already agreed on the value, you don’t need to disclose this.





The separation agreement is signed.





After receiving the agreed payment, your former spouse removes their name from title.





Your former spouse eventually learns what happened and is furious. They feel they would never have agreed to the $500,000.00 valuation if they had known about the much higher value.





So, they take you to court.





What Could Happen if Disclosure Was Withheld?





The scenario above is loosely based on In v. In. In that case, the Court overturned the portion of the separation agreement dealing with the value of the family home and the compensation payment to the wife based on the lower value. The husband was also ordered to pay a fine and costs to the wife.





The disclosure concerns in this case went beyond the home’s value. The husband was on disability when the agreement was signed but returned to work the very next day. The Court also identified failures to disclose information about his return to work and the parties’ debts—important context given that the agreement included a mutual waiver of spousal support.





Under British Columbia's Family Law Act, courts have the power to set aside or replace parts of a separation agreement in certain circumstances. One of the most common reasons is where a party failed to make proper disclosure of significant information during negotiations.





If a court concludes that one spouse withheld material information, several consequences may follow:






The Agreement Could Be Set Aside: The Court may determine that the property division provisions of the agreement should no longer stand.





Property Interest May Need to Be Recalculated: The Court may revisit the value of the asset and determine what a fair division should have been had proper disclosure occurred.





Significant Legal Costs: A party found to have acted improperly may face substantial cost consequences.





Delay and Stress: Perhaps most importantly, withholding information often transforms a completed settlement into prolonged litigation.






The Takeaway





The lesson from In v. In is not simply that disclosure matters. It is that separating spouses must approach negotiations with transparency and good faith.





Family law is different from an ordinary commercial transaction. The law recognizes that former spouses typically have access to different information and are attempting to divide assets accumulated during a relationship. Because of that, the Court expect a high degree of honesty throughout the process.





Trying to be clever by withholding information can become far more expensive than simply disclosing it in the first place.





Before You Sign Anything





If you are negotiating a separation agreement:






Obtain independent legal advice.





Ensure all significant financial information is disclosed.





Be honest and forthcoming with your lawyer.





Ask questions if you are unsure whether something should be disclosed.






A separation agreement can be a valuable tool for resolving family law disputes efficiently. However, an agreement built on incomplete information may not survive judicial scrutiny.





The bottom line is simple: saving a few dollars through nondisclosure can ultimately cost far more. You may end up back in court, facing an overturned agreement, a revised property division, and a hefty costs award. Honest disclosure today is always cheaper than litigation tomorrow.





For more information or legal advice on separation agreements, contact our Family Law practice group today.





The information provided above is for educational purposes only. This information is not intended to replace the advice of a lawyer or address specific situations. Your personal situation should be discussed with a lawyer. If you have any questions or concerns, contact a legal professional.