Financial disclosure is critical to the fair resolution of a divorce case whether contested or uncontested. Not knowing or having access to financial records will likely lead to unfair equitable distribution of assets, improper calculation of child support and spousal support and improper determination of whether counsel fees should be paid by the other person.
There are cases where the parties will decide that they do not need further financial disclosure, that they are familiar with income, assets and debts and wish to expedite the resolution of their divorce. This can certainly be done but there clearly is a greater risk that information that was necessary and would have been available has now been passed over. Therefore, there should be certain minimum disclosure even if not comprehensive financial disclosure.
The most basic financial disclosure is the completion by each person of a Statement of Net Worth, exchange of the past three years of tax returns including the W-2s, recent pay stubs and copies of recent bank statements and credit card statements. In simple cases these core documents may be sufficient however where either person is alleging that one person is hiding assets, or is paid in cash, or falsifying deductions or not sharing account information much more may be necessary.
Attorneys can during a divorce case utilize any and all of the following methods to obtain financial information:
1. Demand Production of Documents: A tailored extensive list of essentially all financial accounts, retirement statements, tax returns, mortgage statements, loan documents, real estate title and closing statements, proof of inheritance or other separate property claims and all other requested documents.
2. Interrogatories: A series of written questions that the other side must answer in writing under oath. Some judges will limit the number of questions that can be asked, however when there is no such limit imposed the number of questions could be in the hundreds even if some of the answers are "not applicable".
3. Depositions: Both clients and their attorneys attend with a court reporter and the party is put under oath and the other side's attorney asks questions related to financial assets and debts before and during the marriage. Depositions can last for an hour or can last for days dependent upon the issues raised such as business interests, movement of monies in and out of accounts, the validity of tax returns, review of the Statement of Net Worth, production and review of business records and any other questions that will lead to the determination of what is separate and marital property and the valuation of assets. Depositions are the most expensive way of obtaining financial disclosure but unlike interrogatories, the attorney can ask follow-up questions and the answers are directly from the other person rather than drafted carefully by the other attorney for the client. Depositions allow in person assessment of the credibility and ease or discomfort of the person answering the questions.
4. Subpoenas: The attorney issues subpoenas to financial institutions for copies of statements and checks, to an employer for employment information such as the contract of employment or calculation of bonus, or reason for discharge if set forth in written records or correspondence.
Most divorce cases do not need all of the above but will likely need document production and possibly subpoenas for missing information. The other two methods of disclosure need to be assessed on a case by case basis given the time involved, amount of assets and cost to the client(s).
Experienced matrimonial attorneys will be familiar with all of these methods and will be able to assess and recommend what is necessary for each case to help obtain the necessary information in a cost effective manner.