FINANCIAL DISCLOSURES

WHAT IS THE FINANCIAL DISCLOSURE PROCESS?

Arguably the most intimidating step in a divorce or custody case is the exchange of financial disclosures. With decades of experience in divorce and custody cases, almost every single client we have has been intimidated or overwhelmed by this process. It is our goal to walk our clients through it with clarity and ease, because while it is a substantial task it should not be a confusion one.

In every case, no matter whether it is divorce or custody, financial disclosures must be exchanged. If money is involved, financial disclosures will be required. Once you file your Petition for Divorce or Allocation of Parental Responsibilities, or a modification of child support or maintenance, the Court will enter an Order requiring you to exchange certain financial information with the other party. This deadline is often quite short, usually just over a month after the filing. It is important that you work quickly to gather all of the documents required as the next steps in your case are often predicated on the completion of your financials. In other words, nothing else can happen until you exchange your documents.

Colorado law requires specific documents to be provided to the other party. Form 35.1 goes into great detail about the documents that you must provide, but these are the documents that are generally required:

 ·      3 years of tax returns, both business and personal

·      Recent bank statements

·      Recent credit card statements

·      Paystubs or other pay statements

·      Retirement and investment information

·      Real estate documents

 Note: not all cases require every document listed above to be provided. For case specific information, you will need to speak to an attorney.

You will also need to complete a Sworn Financial Statement. This is a document available on the Colorado Courts website. The Sworn Financial Statement will be used throughout your case by mediators, the opposing party and counsel, and even the Judge, as a reference for your income to determine maintenance or child support, and to determine the assets and debts that need to be divided in a divorce.

When completing your Sworn Financial Statement it is important to be as accurate as possible. While you should always work with your attorney to complete these forms to the best of your ability, a few general rules should be followed:

1.     The “income” section applies to just your income;

2.     In the “taxes” section, you will only list the taxes that are applied directly to your income or business;

3.     The “assets” section applies to all of the assets held by you or your spouse, regardless of whose name the asset is held in;

4.     The “debts” section also applies to all of the assets held by your or your spouse, regardless of whose name the debt is in; and

5.     “Expenses” can be listed either jointly or separately, but will largely depend on your specific situation.

As clear by the title, the financial statement is “sworn,” meaning that you must be as accurate as possible or you could be in trouble with the Court. This is not meant to intimidate you, but is meant to encourage you to take the process seriously. Many decisions in your case will be based upon the information in your Sworn Financial Statement and the documents you provide.

If you have any attorney, the process of financial disclosures can get expensive if you do not do it the right way. First, make sure that every document you provide your attorney is clearly labeled. Rather than providing all of your credit card statements in one large folder, download and label each statement individually. Second, provide all documents electronically. In today’s legal climate almost all disclosures are exchanged via email or internet document exchange. By providing your documents electronically, you are ensuring that your attorney has to do as little work as possible to convert your documents into a format that can be exchanged with the other party. Third, provide everything at once. Rather than sending documents to your attorney as you gather them, organize them yourself first and send them over to your attorney in one email. This helps keep everything together and ensures that your attorney is not asking for documents that you are still working on.

 Keep in mind that while this process can be arduous, it does not have to be confusing. An attorney can help walk you through the financial disclosure requirement with ease, but you are also capable of completing it yourself so long as you are organized and accurate. If you have questions about your specific case, please reach out to us! We are always happy to help.