Making Financial Disclosures in a Divorce

A divorce is not just the end of your marriage. It is also the separation of everything that you and your ex jointly own. If you and your ex can come to a divorce agreement, the judge can sign off on your divorce case. However, if you cannot agree, the court will have to make property division decisions for you.

Before deciding how to distribute property, the court will need a complete accounting of your financial information, including all of your assets and liabilities. To do this, you will have to file a financial affidavit or financial disclosure form.

Divorce laws vary by state. For specific information about financial disclosures for your divorce, talk to a local divorce attorney.

Filling Out the Financial Affidavit

A financial statement in a divorce is like a worksheet. It includes information about the financial situation of each spouse and what the couple owns jointly. Mandatory disclosure forms will require information about the following for the purpose of dividing your marital property:

• Income
• Expenses
• Assets
• Liabilities and debts

In addition to income and debts, you will likely have to provide supporting financial documents. This includes property valuations, pay stubs, credit card statements, bank statements, tax returns, and debt statements. Your divorce attorney can help you gather the proper documentation to complete the disclosure.

Income in a Divorce

Income includes any money that you make, individually and as a couple. Most people only consider their wages and salary as their income. However, income can come from many financial sources, including:

• Retirement account benefits
• Interest income
• Dividends
• Trust income
• Unemployment benefits
• Social Security
• Rental income
• Spousal support or alimony
• Gifts

Expense Declarations

Expenses in a divorce disclosure statement can include any money or payments going out. This includes shared monthly expenses, marital expenses, and individual living expenses. Common types of expenses that you will need to list for your divorce proceedings include:

• Rent or mortgage payments
• Property taxes
• Utilities
• Transportation expenses
• Groceries
• Pet care
• Expenses for minor children
• Medical expenses
• Clothing
• Insurance payments
• Club memberships
• Vacations and entertainment expenses

Assets and Property

The most significant assets are generally houses, vacation homes, or other real property. Assets also include financial accounts, including bank accounts, investment accounts, life insurance policies, retirement benefits, and business investments. Additional assets may include vehicles, boats, artwork, jewelry, or antiques.

Disclosure requirements can include listing marital property and separate property. In community property states, all property the couple acquires during the marriage is marital property. However, assets from before the marriage, gifts, and inheritance can remain separate property of one spouse.

Liabilities and Debt

Just as couples have to divide assets, they have to divide debts when divorcing. Financial difficulties are a common reason why couples indicate they are getting a divorce. Some common examples of shared debts include:

• Mortgage loans
• IRS tax debt
• Personal loans
• Car loans
• Student loans
• Credit card debt
• Medical debt

Misstatements and Omissions in Asset or Debt Disclosures

In a contentious divorce, you may not want to tell your soon-to-be-ex about all of your assets. However, making misrepresentations in a financial affidavit can lead to sanctions. If the divorce court judge finds out about hidden assets or fraud, they may give your ex more. A judge could also find you in contempt of court. Think twice before trying to hide assets in a divorce.

Both parties have to file the entire form, and it becomes part of the official family law court record. Talk to your divorce lawyer about your spouse’s financial disclosures if you suspect your spouse is hiding assets. During the divorce process, your lawyer can request formal discovery to get access to business records and financial account statements. This can help determine whether your spouse is not disclosing everything in the financial affidavit.

Do You Need a Divorce Lawyer’s Help?

If you and your spouse agree on everything in a divorce, you may not need a lawyer. However, most divorces involve some disagreement over financial matters. Talk through your options with an experienced divorce attorney and have them evaluate your divorce settlement. A lawyer may be able to spot hidden assets. Your lawyer can also make sure you get the property you deserve after a divorce.