Income Discovery in Family Law Cases

By Beverly Bird

If you and your spouse are divorcing, you usually have only one chance to get the terms right. If you agree to a settlement or a judge orders provisions in a decree, both events are based on the financial information available to you or the court at the time. If certain information is unknown, you typically can't go back later and renegotiate your deal or request a new trial. This is where discovery comes in – it's the phase of divorce proceedings when facts are gathered so you know exactly what you're dealing with. Based on the information you receive, you can make educated decisions regarding a settlement -- or the judge can do so in a decree.

If you and your spouse are divorcing, you usually have only one chance to get the terms right. If you agree to a settlement or a judge orders provisions in a decree, both events are based on the financial information available to you or the court at the time. If certain information is unknown, you typically can't go back later and renegotiate your deal or request a new trial. This is where discovery comes in – it's the phase of divorce proceedings when facts are gathered so you know exactly what you're dealing with. Based on the information you receive, you can make educated decisions regarding a settlement -- or the judge can do so in a decree.

Purpose

The discovery process involves gathering information relating to each spouse's assets, debts and income, issues that can be pivotal to your divorce in several respects. If you have children, most states base the amount of child support on what both parents earn. Income is also instrumental in determining alimony awards, and it is sometimes factored into property division in equitable distribution states. These states distribute marital property based on what a judge believes to be fair, and this doesn't always work out to be a 50-50 split. One factor that judges can consider is the earnings potential of each spouse. So, theoretically, a spouse who earns very little might not be able to rebuild after the divorce if the court awards half of the couple's assets to the other spouse.

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Requests of Spouse

Most discovery methods require the cooperation of your spouse. Interrogatories are a series of written questions that your spouse must respond to under penalty of perjury. You can ask him specifically about all sources of income, and he's obligated to tell the truth. Issuing a notice to produce documents obligates him to provide you with current account statements or any other documents you think might help identify how much he earns. If your spouse drags his feet and doesn't respond to these requests, you or your attorney can file a motion with the court as part of your divorce action, asking for an order to compel him to cooperate. If he still doesn't, he can be held in contempt of court. You can also arrange to take depositions, but this discovery procedure can be costly. It involves an in-person question and answer session under oath and recorded by a court reporter. You can use the transcripts as evidence at trial if necessary.

Third-Party Requests

If you think your spouse is being less than forthcoming with the discovery requests directed to him, you can issue subpoenas to third parties to access information. This is possible whenever you have an active divorce lawsuit and the documents you're requesting are pertinent to your case. For example, you can subpoena your spouse's employer, asking for copies of his payroll records. By law, his employer must comply. You can also request statements from his bank or any other documentation that you think might shed some light on his true income.

Forensic Accounting

If the stakes are high, it's not uncommon for a spouse to attempt to conceal income or other assets in a divorce. In addition to discovery, you can hire a forensic accountant to review the documentation you've gathered. These experts are experienced at looking beyond the surface of documents for clues to identify hidden income or assets. For example, the cost of your spouse's lifestyle might exceed what he claims he's earning and what he should be able to pay based on the income he's reporting. You should be reasonably sure that your spouse is hiding sufficient money to justify the cost of an accountant, however. These professionals are usually expensive, so unless you stand to receive a significant alimony or property award, or unless your children would be shortchanged if your spouse successfully conceals income, it may not be worth it.

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Can You Demand a Proof of Expense List in a Divorce?

References

Related articles

How Does Underreported Income Affect a Divorce?

In community property states, income is a marital asset. One spouse might earn it, but both have an equal right to it. Equitable distribution states treat marital income in much the same way. It affects virtually every aspect of a divorce, so both spouses may have a great deal to gain by telling the court they earn less than they actually do. However, if a court discovers the misrepresentation, the judge can punish the lying party by imposing sanctions -- anything from ordering him to pay the other spouse's attorney's fees to not allowing him to argue against the other spouse's requests at trial.

Examples of Vocational Evaluations for Divorce

Fact-finding -- also called discovery -- is a major part of divorce proceedings, but you have to do it in such a way that the court knows for sure that the facts you're presenting are true. Facts presented in court should be backed up by either documentation or expert opinion. A vocational evaluation is a form of expert opinion. You can submit a copy of an evaluator's report to the judge, use it in settlement negotiations, or call the evaluator to testify at trial. However you use it, an evaluation can be pivotal to the outcome of your litigation.

How to: Formal Request for Discovery in Family Law

It isn't likely you will pass through the straits of divorce without discovering something about your spouse's character and your own, but the legal term "discovery" refers to something more formal: the procedures available for getting questions answered in a lawsuit. Trust is one of the first casualties of a divorce, making information-gathering difficult; the discovery process fills that gap by requiring each party to provide true information under penalty of perjury, but only if the asking spouse follows state procedures.

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