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25 Jul 16

Do we have to complete the financial disclosure?

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Do we have to complete the financial disclosure?
Financial disclosure papers are a part of nearly every divorce in the country. Some divorcing couples do not want to disclose personal financial information or lists of assets. That can be a problem because getting around this requirement of divorce can be difficult or impossible. Here is what to know about whether you and your spouse need to complete the financial disclosure during a divorce.

Why Financial Disclosure Is Considered Important

Financial disclosure in a divorce case is considered very important by the courts for a variety of reasons. The first is that disclosure papers ensure that both spouses understand the financial assets and position of the other. This allows each spouse to make informed decisions about what is or is not a fair settlement during the divorce. Judges wants to see financial disclosure statements because it allows the court to determine objectively if a ruling or settlement is fair to both parties. The papers are seen as especially critical when determining financial aspects of the divorce related to children.

Financial Disclosure Is Always Necessary

The reality is that complete financial disclosure is almost always necessary when filing for divorce. Every state but California requires both spouses in a divorce to submit disclosure papers in some form. Many jurisdictions will simply not allow you to get a divorce unless the financial disclosure papers are completed. This is true even if you and your spouse came to a settlement on your own or through independent mediation. There are very few ways around this rule of divorce.

Limited Financial Disclosure

One possible option you might be able to use is filing a limited financial disclosure. This provides the spouses and courts with far less information than a full disclosure. A limited financial disclosure usually just involves a couple of recent paychecks, your last tax return and some bank statements. The issue is that not all judges in a divorce will accept a limited financial disclosure. The main reason to attempt this is if you and your spouse both attest to having a complete knowledge of the financial state of the other. You must also have a fair settlement ready for the divorce. The judge will then just look at the limited information to make certain the settlement is acceptable.

Signing Waivers

Signing financial disclosure waivers is only commonly accepted in California. There is, however, some precedent for this process working in other states. Using this option means that both spouses in a divorce sign detailed waivers stating that disclosure is not necessary because both parties understand the finances of the other. This could allow you to get a divorce through mediation without having to file disclosure papers. It will ultimately be up to the judge in the divorce case to determine whether the waivers will be accepted or not. It is best to consult an experienced divorce attorney before attempting this.

Penalties for Lying or Hiding Assets

Financial disclosure papers are considered so essential to a divorce case that there are penalties for people who refuse to provide them, hide assets or simply lie about things. The penalties could include additional charges for perjury. The court could penalize a couple attempting to obfuscate financial disclosure papers with monetary fines. The worst penalties can include contempt of court charges that lead to time in jail. This is why it is always best to just file honest and complete financial disclosure papers when going through a divorce.

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