In a divorce, one of the most difficult aspects to resolve revolves around financial matters within the marriage. For better or worse, money, and financial issues, are one of the leading causes of divorce in this country, which means that during the dissolution process, it is bound to make things more difficult for both parties.
While determining what assets comprise of a marital estate is extremely complicated in family law matters, the biggest issue the parties may need to overcome is often dishonesty. Unlike other common issues during a divorce money can cause a person to dig in, and create a veil of secrecy because of a feeling that they are the sole person entitled to what they earned during a marriage that is now dissolving. Secret bank accounts, hidden income, and any number of devices are used to keep the true value of a person's income out of their spouse's reach. Hard feelings arise easily when one person feels that their spouse is unwilling to inform the other of their marital estate and financial situation.
When commencing a family law matter, the vast majority of cases require the parties to exchange their financial documents reflecting their assets, liabilities and income. Those documents include, but are not limited to, bank statements, tax returns, pay stubs, credit card statements and documents related to a business, if any. There are some instances when financial disclosure is not necessary, such as in simplified divorces or when parties are in agreement as to how their assets and liabilities will be distributed.
Financial disclosure is necessary in many cases when one spouse handled all of the finances and the other spouse had always been kept in the dark during the marriage with respect to the parties’ true financial situation. Financial disclosure requires the exchange of the following documents, at a minimum:
- Financial Affidavit - Not to be confused with the Financial Disclosure. Both parties will need to complete a Financial Affidavit form, which includes information about assets, expenses, and investments.
- Personal Income Tax Return
- Business Tax Return - This refers to a business in which a person has more than a 30% ownership interest.
- Income Documents - Meaning paystubs, or any evidence of income for the past 3 months.
- Real Estate Documents - Often, it's within real estate that large sums of assets may be hidden.
- Bank Accounts
- Retirement Plans - Many spouses don't realize that their retirement plans are part of their marital assets and can be split equitably between them.
- Health Insurance - This is important for financial reasons, but additionally if there are children involved in the divorce, health insurance must be provided for the benefit of the children.
- Personal Debt - While the equitable distribution of assets is the usual concern in a divorce, personal debt is just as important. Unfortunately, this can mean that one spouse takes on the debt that a financially irresponsible spouse has incurred over the course of the marriage.
The process of discovering the facts related to the marital finances are half the battle. Once the assets are identified, those assets must be valued. Typically, assets are valued as of the date the petition to dissolve a marriage is filed. However, it is common that different dates valuation are chosen for different assets.
A thorough and experienced attorney will make sure to cover all the pertinent information, and more, and determine what should be included in a person's Financial Disclosure. The decisions made in this process can make the difference between a fair divorce that is resolved quickly, and one that requires further litigation.
Vilar Law has been practicing family law for more than 20 years. When going through proceedings of receiving a spouse's financial information for the purpose of dissolving a marriage, Vilar Law's experience is invaluable to quickly uncovering assets and income, and insuring that they are split fairly among the divorcing parties. Contact the Vilar Law Offices at (305)373-8000, to schedule a consultation.Sources
This is probably your first time dealing with these important issues, but it certainly is not ours...