Financial Disclosures in Divorce
A divorce is often an emotionally draining process, and it can become even more stressful when the issues of property division or support come up during a high-asset divorce. In Colorado, spouses are required to make certain financial disclosures in divorce.
At Plog & Stein, P.C., our legal team can help you understand your rights and protect your financial interests. We know that the stakes are high regarding your financial future. We will fight aggressively for you to pursue a favorable short-term and long-term outcome in your case.
Key Takeaways
- Financial Disclosure is a Critical Step
Colorado law requires both spouses to complete a Sworn Financial Statement and provide supporting documents within 42 days of initiating divorce proceedings. This ensures transparency for equitable asset division, spousal maintenance, and child support calculations. - After Disclosure: Property Classification and Division
The court uses disclosed information to classify property as marital or separate and determines a fair division of marital assets based on factors like contributions to the marriage and earning potential. - Accurate Disclosures are Essential
Misrepresentation or omission of assets during the financial disclosure process can lead to penalties, including reallocation of assets up to five years after the divorce is finalized. - Financial Information Guides Negotiations
The information shared during disclosures is vital for settlement discussions. If no agreement is reached, it becomes key evidence during trial preparation. - Legal Expertise is Crucial
Navigating post-disclosure steps in a divorce can be complex, especially in high-asset cases. Experienced family law attorneys can protect your financial interests and ensure compliance with Colorado’s strict disclosure requirements.
Understanding the Required Financial Disclosures in a Divorce
The Financial Disclosure Process in Colorado Divorce
Colorado Rule of Civil Procedure 16.2(e) requires both parties in a divorce to complete financial disclosures early in the process. These include:
- A Sworn Financial Statement, detailing income, expenses, assets, and liabilities.
- Supporting documents, such as tax returns, bank statements, and retirement account information.
This comprehensive disclosure ensures transparency for property division, spousal maintenance, and child support calculations.
This disclosure step is to be made quite early in the process without a formal discovery request from the other side. In fact, the rule requires that mandatory disclosures must be completed within 42 days of service of a petition for dissolution of a marriage unless there is an objection to the disclosure.
Financial information that you may need to provide includes but is not limited to:
- Personal and business tax returns for three years before the filing of the petition;
- Personal financial statements for three years before the filing of the petition;
- Information relating to bank or financial institution accounts;
- Title documents and all documents pertaining to marital real estate;
- Documents pertaining to personal debt (i.e., credit card statements, loans, etc.);
- Documents identifying retirement plans;
- Information highlighting average monthly employment-related child care costs;
- Life insurance, health insurance, and any other insurance documentation;
- Documents relating to any investments; and
- Documents relating to employment benefits.
The idea behind these disclosures is to give the court an understanding of each party’s financial standing during a divorce. Courts then use this information to determine a fair division of the marital estate. Disclosures also give each litigant an understanding of the marital estate and income, which can assist in both settlement negotiations or trial preparation.
What Comes Next After Financial Disclosure?
After financial disclosures are exchanged, the focus shifts to how the information will be used in the divorce process.
1. Property Classification and Division
The court begins by determining whether assets and liabilities are marital or separate:
- Marital property includes assets or debts acquired during the marriage and is subject to equitable division.
- Separate property refers to assets acquired before the marriage or through inheritance or gifts, typically excluded from division.
Using the disclosed financial information, the court evaluates factors such as:
- Contributions of each spouse (both financial and non-financial).
- Each spouse’s earning potential and education level.
- Costs associated with caring for children, if applicable.
2. Settlement Negotiations or Trial Preparation
The information provided during financial disclosure plays a critical role in settlement discussions. Accurate disclosures help both parties assess the marital estate and negotiate terms for:
- Property division.
- Spousal maintenance.
- Child support.
If a settlement cannot be reached, the disclosures become essential for trial preparation, allowing each side to build a strong case.
3. Court Oversight and Penalties for Misrepresentation
Accuracy in financial disclosures is vital. Courts impose severe penalties on parties who fail to disclose assets or provide misleading information. If omissions or misrepresentations are discovered, the court can:
- Reallocate assets within five years of the final divorce decree.
- Penalize the dishonest party during the property division process.
At Plog & Stein, P.C., we take the duty of financial disclosures very seriously and are equipped to take action should the other side be evasive or if more information is needed.
While financial disclosures in divorce may seem straightforward in theory, they are often very complicated. At Plog & Stein, P.C., our Denver family law attorneys can help you navigate the mandatory disclosure process thoroughly and efficiently.
With over 70 years of combined experience in Colorado family law, we are familiar with the full range of issues that can arise. We also represent people in Aurora, Centennial, Highlands Ranch, Castle Rock, and other cities in Denver, Douglas, and Arapahoe Counties. To speak to our attorneys in more detail about your case, call us at (303) 781-0322 or contact us online.
