Why Is a Financial Disclosure Important During Divorce?

Splitting up after years of marriage is difficult for many reasons. Aside from the loss of companionship and future plans, you may face an uncertain financial future.

One of the requirements of all divorcing couples is an accurate accounting and disclosure of all financial matters. This means you and your spouse must account for all assets and debts held jointly or separately. What are the repercussions if this step is not performed? Find out more about the impact the financial disclosure has on your divorce and what a judge might do if you hold something back.

Individual Bank Accounts

You and your spouse may have shared equally in all income, assets and debts while married. Thus, you assume your disclosures will look similar. However, there may be more going on than you know. If your spouse initiated the separation, they might have opened a separate bank account. Attorneys and financial advisors tell clients it is wise to start an individual checking account before or during a separation. Your financial disclosure should include this personal account.

Dividing Assets and Debts

A fundamental element of every divorce, regardless of the state, is the division of property between the spouses. There is no uniform way this is done. States usually either split property equally or equitably. The court will use the financial disclosures and the identification of what each spouse owned before the marriage. Most laws allow divorcing spouses to keep anything they held before the union. Only the items procured during the marriage or those with both spouses named that are divided.

Hiding Finances

The court does not look kindly on a spouse who attempts to hide assets. The court itself does not go in search of the money, but the opposing spouse may. The reason for one spouse stashing cash from the other usually has to do with the fear of paying a substantial settlement. For example, if one spouse stayed at home to raise children while the other’s career advanced and flourished, the career spouse may feel it unfair that they have to share some of that money with the one who didn’t have a job. However, according to many courts, staying at home to raise children is worthy of equal or equitable compensation during a divorce. When one spouse is found to be hiding money, the court may penalize them with the loss of the asset in its entirety.

If you have questions about whether you should disclose something or not during your divorce, a lawyer, like a family lawyer in Fairfax, VA from May Law, LLP, can help. It is better to err on the side of caution instead of getting penalized for not doing so later.