While divorces can be emotionally impactful for spouses in the United States, they can also be financially impactful. In fact, the financial consequences of a divorce can be felt long after the emotional consequences have faded away. Spouses attempt to mitigate financial consequences however they can during a divorce, and they do this in a number of different ways. Like virtually any other area of law, divorces rely heavily on information. When spouses are trying to gather as much financial information as possible during a divorce, they rely heavily on various financial documents. Which of these documents is most important?
Financial Disclosure Statement
Financial disclosure statements are required for all divorces. The only time this document is not required is when a waiver of financial statements is signed. Essentially, the financial disclosure statement is a snapshot of the marital estate, complete with all of the various assets and liabilities of each party. Each spouse must fill out their own financial disclosure agreement and share it with the court and each other. This becomes the main reference point for all parties when resolving a wide variety of matters. These issues include child support, debt, property division, spousal support, and virtually anything else that involves finances.
Mortgage/Real Estate Documents
For most spouses, their family home is their most valuable asset. Therefore, all financial documentation that relates to this asset is of the utmost importance as spouses divorce. There are a number of potential documents that fall into this category, including mortgage statements, initial purchase agreements, refinancing documents, property tax documents, and the legal description of any real estate. The overall purpose of these documents is to determine who actually purchased the real estate initially, how much the property is worth, and the status of the mortgage.
Life Insurance Documents
Life insurance may play a major role in many divorces. It can be considered marital property, and so it may be divided between both spouses. This can become quite complex, as life insurance may have a cash value. Spouses may have also taken out loans against the policies. Life insurance statements clearly indicate these cash balances, and whether or not loans have been taken out. They also indicate who has been named as beneficiaries.
Pension Fund Documents
Retirement assets may also have a considerable impact on a divorce, especially if spouses are at an advanced age when their marriage ends. Pension fund statements must be examined carefully, as all contributions made toward retirement assets during the marriage are considered marital property. Some of the most useful retirement documents may include recent statements for pension funds, retirement funds, 401(k) plans, mutual funds, or IRAs.
The Honor System
Finding the correct information is crucial for attorneys who wish to handle divorces in the most efficient manner. However, to some extent, this entire system operates via the honor system. If a spouse is determined to conceal their assets, many of these financial documents will be unreliable and therefore useless.
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