Financial Documents and Divorce

by  Sherri Donovan, Esq

Marriage is an economic partnership. You have a right to all records affecting the finances of you or your spouse. It does not matter in whose name the papers and accounts are kept. It will be cheaper, easier and faster if you collect as much documentation as you can instead of your lawyer.

Financial documents contain important information about the assets, debts, income of the marriage, and expenses. Pay stubs not only disclose income, but may also show if a person contributes to retirement funds or has health or other company or union benefits. A personal tax return is the window into income and marital assets. Personal tax returns not only demonstrate income, but may also show dividends and interest from the assets acquired throughout the marriage.

A business may be considered a marital asset.  Business tax returns show gross business earnings and expenses paid for by the business. Business tax returns will show expenses that may be legitimate for the IRS, but may be considered imputed income in a divorce action. Any expenses providing a benefit to the family, i.e., telephone, travel, auto expenses etc., and paid for by the business may be considered part of a party’s income in a divorce action.   It is important to obtain partnership/employee agreements, sales contracts, and business records and books. Be wary of cash businesses in which there may be two sets of books or no “official” records at all.  In this situation, customer and vendor receipts and invoices will be also useful.

Mortgage and loan applications are an excellent indicator of marital assets. Many times I have found assets on loan applications that were not listed on the financial affidavits in the divorce action. Resumes can provide evidence of marital assets such as educational degrees, professional licenses and special skills that were acquired during the marriage. Resumes will also itemize former employers where your spouse may have acquired retirement funds. Credit card statements may show the family’s lifestyle and/or funds spent on adultery.  Funds spent on adultery can be considered a dissipation of assets entitling the other spouse to a credit.

Be resourceful in obtaining documentation. Documents can be obtained from your spouse or the family accountant, financial adviser or lawyer. They may be located in the marital residence or in your spouse’s business office. The Internal Revenue Service will provide you with copies of any tax returns that you have signed. Deeds are located in the County Registrar or City Hall office where real property is located. Information and statements concerning bank accounts, mortgages, loans, investment accounts, credit cards, pension and other employer benefits may be obtained by contacting the specific institution or employer. If you cannot obtain certain documentation, your divorce attorney will seek such information during the legal proceedings.

Assets tend to disappear during a family crisis and the break-up of a marriage. Before a divorce action commences, record the balance of all accounts and notify all institutions and brokers not to release funds without your express approval. You can withdraw funds to use for reasonable expenses or to put in a separate account for safekeeping. Maintain careful records of any funds withdrawn from accounts because during legal proceedings you will have to provide full financial disclosure. Credit lines and home equity loans should either be utilized by yourself or closed; otherwise your spouse may utilize them and incur more debt. If you borrow money from such sources, be aware of the interest rate. Establish credit in your own name before the divorce because it may be more difficult to do so after you are divorced.

Sherri Donovan, owner of Sherri Donovan & Associates, is a family and matrimonial attorney with over 25 years of experience. Ms. Donovan is also a professor of forensic psychology and family law, neutral evaluator for New York State courts, mediator, and parenting coordinator. Visit www.sherridonovan.com for more information.

Comments (2)

  1. Pingback: Sherri’s July 2013 Newsletter! | sherri'sblog

  2. I am going through a divorce now. My soon-to -be has moved money around daily for 3 years. He was court-ordered to pay alimony and was paying and now because i stopped talking to him he has stopped paying that money. I am very frustrated because the legal system seems so slow. My attorney has ask for papers on his retirement and he wont turn them in ; we had to court order him to turn them in. I was not the one who wanted out . He tries to act like he is sad but he wanted out . He moved our furniture out of the house a year before we actually seperated. Stupid me slept on the floor for a year. I am so frustrated with life right now. I know it will get better but when

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