We recently discussed the critical importance of the Requests for Production of Documents that as a divorce attorney you send to opposing counsel so as to gain financial information about your client’s spouse. These documents are especially important when your client is half of a high net worth couple. Once you receive the documents, your CFL Designation for Divorce Practitioners serves you well, giving you the advanced financial knowledge necessary to fully comprehend and analyze them.

This week our focus is on the importance of receiving the documents that pertain to the spouse’s personal financial status. The AACFL has devised a personal documents checklist to help you remember all the documents you should include in your RFPs. You can download this checklist for free, secure in the knowledge that it was designed by lawyers and forensic accountants specifically for use by practicing attorneys.

Retirement Accounts

Naturally, you want copies of the spouse’s federal and state income tax returns for the past several years. However, these are just your starting point. Tax returns fail to reveal the spouse’s true financial picture since they do not show the future income (s)he will receive from his or her deferred compensation and/or retirement accounts. Nevertheless, these accounts are current assets which most jurisdictions include in a couple’s marital assets that are subject to fair and equitable distribution in the event of a divorce. For many high net worth couples, these accounts represent a major portion of their marital assets. For some, they represent the largest single asset.

As you may know, most pension plans have their own rules and regulations to which you must scrupulously adhere when dividing their benefits between your client and his or her spouse. Most plans, and most judicial jurisdictions, require you to prepare a Qualified Domestic Relations Order for the judge to incorporate into your client’s property settlement agreement and divorce decree. QDROs are some of the most complex and complicated documents you likely will ever be required to draft. Again, your CFL Designation for Divorce Practitioners serves you well.

Deferred Compensation

Many employers attract and incentivize highly-paid executives by offering Restricted Stock Units and/or Performance Stock Units as part of their deferred compensation plans. The executive does not currently own the actual stock that these RSUs and PSUs represent, but rather “notational shares” measured and valued against the company’s stock. (S)he can elect to defer these stock units, even those that have not yet vested, thereby giving him or her the opportunity to diversify his or her equity position within the company using pre-tax money that continues growing on a tax-favored basis.

Phantom Stock Plans

Another popular deferred compensation method companies use to incentivize their executives is a phantom stock plan. PSPs basically are bonus plans whereby the executive receives a reward of a certain number of “phantom” stock shares equal in value to that number of shares of the company’s actual stock. The executive can elect when (s)he receives the bonus subject to the plan’s provisions.

Your free AACFL personal documents checklist includes these and many additional documents you need to request from opposing counsel in your Requests for Production of Documents. For more information on financial issues you need to be aware of, how gaining your CFL Designation for Divorce Practitioners will give you the financial knowledge and skills you need to attract additional high-asset clients, and the other benefits of AACFL membership, please visit this page of our website.