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.
Understanding the Required Financial Disclosures in a Divorce
As soon as the court acquires jurisdiction over both parties in a divorce proceeding, Colorado Rule of Civil Procedure Rule 16.2(e) requires both spouses to complete a financial affidavit and provide extensive financial disclosures to the other party. These disclosures pertain to the equitable distribution of assets and liabilities, maintenance calculations, and even 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.
The financial affidavit each party is required to provide is technically called a “Sworn Financial Statement.” This is a global disclosure document, which requires a party to state their income, expenses, assets, and liabilities under oath. All other disclosures flow from this statement. 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. In Colorado, property in a divorce can be classified as either marital property or separate property. Marital property includes any assets or debts acquired over the course of the marriage and is subject to division at the time of the divorce. Separate property is anything acquired by gift or inheritance (or before the marriage) and is not subject to division at the time of the divorce. When it comes to making a property division determination that is “fair,” the court has broad discretion to consider any factor that it deems relevant, such as the contribution of each spouse to the marriage (both financial and homemaking contributions), each spouse’s education level and earning potential, the cost of care for any children involved, and more.
It is critical that financial disclosures be made carefully and accurately. Courts do not look kindly on a party who has lied or omitted information in the disclosure process. If the court determines that a party withheld information or failed to make an accurate disclosure, that party could be penalized in the asset division process. The court can retain jurisdiction for a time frame of five years after the entry of a final divorce decree to reallocate assets that were obtained through an omission or misrepresentation. 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.
Discuss Complex Financial Issues with a Divorce Lawyer in the Denver Area
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.