Once your divorce is underway, you may not want to give your spouse anything, much less personal financial information that you feel he ought to already have. Based on the laws of your particular state, financial disclosure is required at various stages of divorce -- and complying fully can actually work in your favor. Understanding what you are expected to disclose at each stage of the proceeding will help you fully comply with the law -- and move your divorce along.
Financial Information You Must Disclose
In the initial, or preliminary, financial disclosure the same information is generally required of each spouse. This includes income from all sources, all expenses, a list of all assets and a list of all debts. The listed items should include everything owned jointly with your spouse. It should also indicate all your separate property, which includes any property you owned before marriage, as well as property you individually acquired by gift or inheritance during the marriage. The information is assembled into a financial affidavit that's filed with the court and exchanged between spouses.
Documentation Supporting Financial Disclosure
If an attorney is filling out the financial affidavit, he will require support for the financial information you provide. This may include a copy of any pre or ante nuptial agreement between you and your spouse, copies of any deeds and mortgages, past years personal and business tax returns. pay stubs or statements usually for the past three months, explanations for any withholding or deductions such as union dues or garnishments, and copies of all credit card, investment account, retirement account and bank account statements.
Interrogatories and Document Requests
If your spouse or her attorney believe that you are hiding assets and not fully disclosing your financial situation, you may receive a list of interrogatories, or questions, and a list of requested documents. You must respond to the interrogatories in writing -- and the documents must accompany your responses. Usually the questions and requested documents are fairly similar to those you encountered when working to complete your financial affidavit, including balances and activity on all your accounts, explanations of income and tax returns.
Second Financial Disclosure
Some states may also require a second disclosure prior to the final divorce hearing where the divorce will be granted. This second disclosure is often for the purpose of accounting for any financial activity that occurred since the first financial affidavit was filed. This disclosure requires updated information on all financial asset and debt accounts, updated tax returns and updated income information. If both spouses feel confident that they are up to date on the other's finances, some states, such as California, allow waiver of the second disclosure.
Consequences of Failing to Fully Disclose
The financial affidavit is a sworn document, which means by signing it, you are swearing that the contents are accurate, meaning all finances are disclosed and nothing is omitted or overstated. If it's learned that a spouse hid assets, the court may award more to the other spouse as a punishment for the guilty spouse's concealment. He can also be held in contempt of court and fined and/or jailed for lying to the court. If a hidden asset is discovered after the divorce is final, the innocent spouse may return to court where the asset will be divided. Again, often the court gives the innocent spouse a greater share than she would otherwise receive -- and the dishonest spouse may have to pay her attorney fees, as well as still face contempt of court.