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A divorce can be extremely volatile or amicable, but either way, you’ll have to disclose information you may wish to remain private. One of those disclosures involves financial information. The court needs this information when making determinations during the proceedings.
Financial Information That Must be Disclosed
When filling out the paperwork for your divorce, you’ll need to declare all your income from all sources. You’ll also need to include all expenses, so the court can get a full picture of your finances. This list should include all assets and liabilities including property owned before the marriage.
Full Documentation of the Finances
Your family law lawyer will want to receive supporting documents regarding your finances. This should include copies of deeds and mortgages, paystubs for the past few months and tax returns for previous years. When asking for tax returns, the lawyer may ask for both personal and business tax returns if you own a business. You’ll need bank, credit card and retirement account statements.
Requests for Documents
The financial information must be shared with your spouse’s lawyer. Both spouses will exchange this information during a divorce. If you feel as if your spouse isn’t disclosing all financial information, your attorney can send a list of questions and interrogatories to the other lawyer along with a list of requested documents. Your spouse must send the requested documentation to support their response.
Financial Disclosures During Divorce
The first disclosure often happens at the beginning of the process. If the case drags on for a long amount of time, the court may ask for a second disclosure to see if there has been a change in information. It’ll request updated information on credit card accounts, an update on tax returns and the last few months of pay stubs.
Failure to Provide Disclosures
When your spouse signs the disclosure, he or she is swearing that the information is true and accurate. If you learn that your spouse is hiding assets, the court should be informed. The court can hold the spouse in contempt, order them to pay a fine or award more to the other spouse in response.
You’re entitled to see the financial documents of your spouse during the divorce proceedings. If your spouse doesn’t respond with the correct information or refuses to send the information at all, your lawyer can file a motion with the court. The court will order your spouse to provide all necessary information.
Finding the Hidden Assets
In some divorces, one spouse will try to hide money by deflating their income. This can be done when they own their own business or work for a small business. They’ll ask for smaller paychecks or hold off on bonuses until after the divorce. If you suspect your spouse is hiding assets, talk to your lawyer about hiring an investigator or accountant to find out the truth.
Effects of Hiding Assets
A spouse who successfully hides assets can lower their alimony or child support payments during a divorce. It can impact property distribution too. The court will see a lowered ability to pay alimony and child support while your spouse will gain an unfair cut of the marital assets.
It’s important that you and your lawyer go over the finances carefully once the financial disclosures are exchanged. It could be worth the cost to hire a forensic accountant or investigator to find out whether there have been assets hidden since it’ll have an impact for years.