How Financial Disclosures Play Into Divorce
Figuring out how much money and assets a person will have at the end of a divorce is a critical issue for all spouses. Dividing one household into two inherently creates new expenses, albeit with the same income, and requires each party to make hard decisions about which costs are truly necessary and which can be eliminated. Before this process can begin, though, both spouses need an accounting of all financial resources, so each knows what is reasonable to expect and what amount is reasonable to demand. No one wants to give up money and assets acquired through hard work and sacrifice, but divorce, absent an agreement, requires that spouses at least divide marital property, and may also include the obligation to pay child support and/or alimony. A key part of negotiating settlement terms or requesting the court settle the division of property and award support is the completion and submission of mandatory financial disclosure documents to the other side and the court. This information is the starting point of the discovery process, the legal procedure parties to a lawsuit use to gather documents and information, and the basis upon which a court analyzes the available marital property for division, as well as the amount of income available to pay support. A discussion of the types of information these disclosures require both spouses to provide, and what to do if a spouse fails to provide this information, will follow below.
What Must Be Disclosed
At the start of most Florida divorces, both spouses must complete a financial affidavit and provide documentation of income and outstanding debts to the other side. This information must be submitted within 45 days of being served with divorce papers, or with the divorce petition if filing. The affidavit serves as an overview of a person’s finances and lists income, assets, liabilities, and monthly expenses, and as mentioned, is also used to calculate child or spousal support. Most divorces require completion of these forms, which differ according to income, with spouses earning below $50,000 completing a shortened version of the form. In addition, a few situations exist which the allow spouses to avoid this obligation, including:
- the couple is filing for a simplified divorce and waived this disclosure;
- the couple have no children, are not asking for support, and have filed a written statement that all financial issues are resolved; or
- the court does not have jurisdiction to decide financial matters.
These circumstances are rare, so most couples need to expect and prepare for gathering and disclosing this information. In addition to the affidavit, both spouses also need to exchange the following documents:
- personal and business income tax returns;
- documentation of income, such as recent pay stubs;
- loan application and financial statements prepared during the previous 12 months;
- real estate documents;
- three months of bank statements;
- most recent statement for retirement or pension plans;
- life insurance policies;
- health and insurance cards;
- debt statements for the past three months, e., loan and credit card statements; and
- all signed pre- or post- marital agreements.
When a Spouse Does Not Respond
Ideally, the other spouse will provide these documents in a timely manner, but the reality is that such cooperation and transparency are not always forthcoming. In order to ensure the settlement one receives is fair, action may need to be taken to compel the relinquishment of these documents, which is accomplished by an attorney filing a request for production or admission. If the failure to disclose this information continues or is linked to intentional acts, the court may impose sanctions, both as punishment and as a method to force compliance.
Financial information is a crucial part of any divorce, and you need the services of an experienced divorce attorney to determine if the information is accurate and sufficient. The attorneys at the office of Joyce A. Julian, P.A. have years of experience helping clients get the settlement they deserve, and are available to discuss your case. Contact the Fort Lauderdale law firm for a free consultation.