Full Disclosure in Divorce: How to Give It and Get It

• Financial disclosure in divorce
• What is full financial disclosure?
• What might happen if you fail to disclose all finances?
• What to do if you suspect your spouse is hiding assets
• How to make sure you’re doing it right

Going through a divorce is an emotional process. Unfortunately, it's also a time-consuming and potentially frustrating process. While transparency is important, financial disclosures require lots of effort on your part, both to collect your information and also to review your spouse's details. Financial disclosures are a vital component of the divorce process.

Financial disclosure in divorce

When a couple decides to get divorced, one of their first tasks is to share financial information with each other. This includes information about all of their assets and liabilities, including their income (pay stubs, tax returns) and expenses. Financial disclosures are important because the information helps keep the process of debt and property division fair – including how much child support or spousal support one spouse might be obligated to pay the other.

The requirements for financial disclosures vary by state, but in most states, some level of disclosure is required regardless of how amicable the spouses are. If one party fails to disclose sensitive information, they could be held liable later on in the divorce process. This could result in a variety of penalties, including fines.

Why are financial disclosures so important?

As mentioned, financial disclosures help keep the marital settlement agreement fair. This is especially important when there are significant assets or debts involved. Furthermore, financial disclosures can help prevent fraud and abuse. When each spouse knows exactly what the other has, it’s much harder for one to try to hide money or assets from the other. 

Finally, financial disclosures can help speed up the divorce process. With all the relevant financial information you need upfront, both parties can work together to negotiate a settlement agreement that is fair and equitable for everyone involved.

Marital vs. separate property

Notably, only marital assets are subject to distribution. Separate property must not be divided. Therefore, it's important to understand the difference between marital and separate property.

Generally, any property acquired during the marriage is considered marital property. This includes items purchased with joint funds as well as items that were given to one spouse by the other. Any property that was acquired before the marriage, inherited, or gifted to one spouse is considered separate property.

What is full financial disclosure?

The term “full financial disclosure” refers to the complete sharing of all information about assets and liabilities. Full financial disclosure is required in most states. That way, there are no surprises when it comes time to divide property and assets.

While the required financial documents may vary based on your financial situation, some requirements are similar across the board. Expect to disclose at least the following:

• Bank statements
• Credit card statements
• Tax returns
• Mortgage statements
• Utility statements
• Retirement account assets
• Student loans
• Real estate deeds
• Business assets and liabilities

What might happen if you fail to disclose all finances?

If you're considering divorce, it's important to understand the full financial disclosure rules that apply in your state. In Utah, for example, a spouse who does not disclose all of their assets may forfeit those assets or pay a fee. This is just one example of how full financial disclosure can impact a divorce proceeding.

When both spouses are completely transparent with each other, they can avoid misunderstandings and accusations later on. Full financial disclosure may even speed up the divorce process.

What to do if you suspect your spouse is hiding assets

If one spouse tries to hide assets, the other spouse will likely find out. Hiding assets can cause major problems. For example, let’s say one spouse has been hiding money in a secret bank account. The other spouse will find out about the account during the financial disclosure process. Hiding assets can lead to accusations of fraud or spousal abuse. 

If you suspect your spouse is hiding assets that may be subject to distribution in divorce, it's important to take action. Gather as much information as possible. You'll need to track down bank statements, credit card bills, and other financial documents. If your spouse is trying to hide assets, they may be doing so by transferring money into different accounts or by buying expensive items that can be easily hidden.

How to make sure you’re doing it right

To find out what financial disclosures are required for divorce in your state, the first place to look is your state or county clerk of court family law section. Most clerk websites include detailed information, including the actual forms you'd need to complete. Reviewing the financial disclosure form will give you a much better idea of what information and documentation you need.

Hello Divorce can offer you guidance. We know divorce can be an exceptionally confusing and frustrating process – not to mention an emotional one – so our dedicated team of family law professionals is standing by to help you navigate the complexities of financial disclosures. Whether you would like to sign up for an hour of financial planning with a certified divorce financial analyst or just want to learn more about our plans and legal services, please reach out. You can schedule a 15-minute free phone call with one of our friendly account coordinators here.