Most likely, your divorce attorney will request numerous financial documents for divorce settlement negotiations. These documents are important because they will serve as the basis for fairly dividing your property and debts.
Getting your financial paperwork organized as soon as possible is crucial because key documents can disappear or you may not get access to them once the divorce has started. Below are suggestions on what documents you’ll need and where to search for them.
How Good Records can Help Secure a Fair Divorce Settlement
By Brian D. Joslyn, Esq., Ohio family law attorney
Divorces are emotional and challenging, all of us know that and have seen them play out at various times throughout our lives. That said, just because you and your soon-to-be ex-spouse have decided to separate and pursue a divorce, doesn’t mean it has to be a long drawn out (and costly) brawl in the legal system. As WomansDivorce.com has mentioned before, controlling the costs of a divorce is in the best interest of both parties and your estate.
Below I’ll go over all the elements you should try to secure before your filing for the best opportunity at a fair divorce settlement. Also, this isn’t about greed, it’s about being able to establish your next chapter in life with your equity from your former chapter.
Obtain Financial Records (and Make Sure None Are Concealed)
Let’s face it, finances are one of the key factors in a divorce and oftentimes they are the most contested element of settlement negotiations, along with child custody.
To ensure you have a fair opportunity for your share of the communal estate, you need to know everything about you and your spouse’s finances. Keep in mind that many couples combine their assets early in a marriage, which often leaves only one person with easy transparency to certain accounts, benefits, and records.
If you’re uncertain if you have complete insight to your finances, we recommend you review the following checklist and seek to acquire the appropriate account information and details while you’re planning for divorce:
- Bank statements
- Tax returns
- Pay stubs
- Credit reports
- Mortgage and loan documents
- 401(k), IRA, and other investment account statements
- List of all liabilities (cars, credit cards, loans)
- Insurance policies
- List of personal property and any ownership records
Depending on how long your divorce proceedings take, these figures could change, but probably only slightly, so having a benchmark for you and your legal team’s use is a wise decision. In the same grain, this allows you to confirm the account numbers, login credentials, and any pending notices you two may have.
Finding Concealed Assets (if They Exist)
If you’ve successfully collected and reviewed the financial records above, you most likely have a good understanding of your financial situation. However, we have seen instances where one partner has been performing odd transactions that don’t add up. If you see any of the patterns below, it could be worth your time to probe your financial institutions further:
1. ATM Withdrawals
We’ve had clients whose partner performed ATM withdrawals on a regular basis, which normally didn’t raise any red flags, but under new scrutiny appear more suspect. While smaller withdrawals might not seem like much, they can certainly add up, definitely if performed over years and at regular intervals. If you notice any of these patterns, we’d recommend looking into it further, as it can lead you to question your spouse and their use of shared funds all these years.
2. Credit Reports
Commonly, one partner might “handle the finances” because they enjoy those kinds of tasks or have business dealings that suggest they can be trusted with such tasks. For most couples, that’s true, but not all. It could be a good idea to review your credit report to check for any activity that might seem abnormal.
There have been countless times where one spouse has opened up a credit card in both parties’ names but they’re the only one who is using that credit card. If you discover something similar, bring this to your legal team’s attention as it can be a sign of fraud or, pending no finding of fraud, you’d be liable for those debts too.
3. Tax Returns:
There’s the old saying, “nothing is certain but death and taxes” and there’s a reason for that – don’t mess with the IRS. Most upstanding citizens do whatever they can to stay on the good side of the Federal government and the IRS, since fraudulent filings often lead to jail time. It’s really easy to obtain your tax documents online, which is why we recommend you review those documents.
One example I’ve seen is where a spouse had a bank or investment account that paid interest but their partner was none the wiser. This was the canary in the coal mine to alert them their spouse had assets previously undisclosed and private from the union.
4. Business Documents:
If your partner has a business that you’re not overly involved with, you likely don’t know the ins and outs of their balance sheet. Many family businesses such as limited liability companies (LLC) include both a schedule of assets and a schedule of transfers that have been made since the company’s inception. You can discover business assets that could have escaped your path earlier in the relationship, but oftentimes include real estate properties/offices and additional investments or tangible assets.
Analyzing Your Financial Picture
Pending your spouse hasn’t exposed themselves via one of the fraudulent or perjury examples we noted above, you now have all the information you need to assess your portfolio for your pending divorce proceedings.
One way to hedge your bets for an amicable divorce is to be really clear and by-the-book with your documentation. I recommend putting all of these figures together in a spreadsheet. For each asset, you indicate the asset type, the current ownership status, and current market valuation. This also applies to your debts, so you’ll need to note who is indebted, what is currently owned, and the terms for that repayment.
By having all of this in one easily accessible document for all parties to reference, paired with the digital and hardcopies you made earlier, you should be able to convey that you’ve done your due diligence. Not only does this show your depth of understanding for the situation, but you likely just saved yourself a lot of money by being able to expedite the process.
After Your Divorce
Now that the ink has dried and you’re officially single again, our hope is that your experience was as amicable as possible. No matter how it played out with your ex, you were prepared and a big silver lining to your efforts is that you now have a comprehensive understanding of your finances. While your future might be uncertain (and that’s a good thing) at least your finances won’t be! Keep your portfolio up to date and good luck in your next chapter of life.
Brian D. Joslyn is the founder of the Joslyn Law Firm with offices throughout Ohio. He is a family law and divorce attorney in Columbus, OH who has helped many clients navigate the legal complexities of divorce, child custody, spousal support, and division of property. Brian has seen far too many bitter divorces, so he always encourages amicable and speedy solutions for the sake of all parties involved.