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Preparing for Divorce: The Importance of Financial Knowledge

In almost every divorce, financial information is exchanged between the parties. Whether it be informally listing assets and debts and dividing them between spouses, or a more involved and organized discovery process whereby account statements, financial declarations, professional valuations, interrogatories, etc. are exchanged, or a process somewhere in-between, it is an important to know enough about your financial circumstances that you are able to make a sound decision.

In our experience, most cases necessitate, as a bare minimum, a financial declaration to be submitted by both parties. This document requires parties to describe their expenses, debts, and assets, in six pages. When asked to fill out a financial declaration or just answer some preliminary financial questions, clients are often surprised how little they know about their current financial situation. In many marriages, a couple delegates to one spouse or the other responsibility for paying bills, investing for retirement, purchasing life insurance, filing taxes, etc. When this occurs, the party not delegated to do these tasks is often left (albeit usually unintentionally) in the dark regarding finances. In these cases, it becomes especially important for us to use various discovery methods that become available after a petition is filed to discover the information the in-the-dark client is missing.

However, there are things that can be done prior to the petition even being filed that can help a person anticipating dissolution of their marriage. First, look at the financial declaration and start taking notice (and taking notes) of the requested information each month. Second, speak with a family law attorney regarding the best way to prepare yourself financially for the filing (or receiving service) of a petition for dissolution (be sure to tell your attorney if you are afraid that the other party may try and hide assets if/when a petition is filed). Your family law attorney will also help you design a discovery plan based on your financial circumstances. Third, if your financial acuity is lacking, find a way to give yourself a quick financial education. There are many websites that provide explanations for financial terms, types of assets and accounts, etc. The more you know about your financial situation the better prepared you will be to make educated decisions regarding your financial future. Our family law attorneys are ready to assist you in this process.