Colorado Mandatory Financial Disclosures: What You Need to Know
When couples get divorced, they are required by law to share their personal financial information with each other. Why? Sharing financial information upfront helps make the process of dividing your marital estate (home, vehicles, debts, and such) as fair as possible.
Colorado is an equitable distribution state. This means the state wants you and your spouse to divide things fairly when you part ways. And this is where many divorcing couples get stuck – they can't agree on how to divide their finances and end up having to hire divorce lawyers to fight it out in court.
At Hello Divorce, we believe there is (usually) an easier way. That's why we offer services like mediation and divorce coaching.
But before you can even consider dividing your property – or asking a mediator to help you figure out how to divide it – you are required by law to exchange certain financial documents. The divorce term used to describe this process is "financial disclosure."
In Colorado, both parties to a family law case are required to complete mandatory financial disclosures for divorces, child support modifications, allocation of parental responsibilities matters, and the like. So, what does this mean for you and your divorce?
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What are mandatory financial disclosures in Colorado divorce?
Colorado’s mandatory financial disclosures involve three court forms:
- Sworn Financial Statement (JDF 1111)
- Supporting Schedules (JDF 1111SS)
- Certificate of Compliance (JDF 1104)
These documents must be completed by both parties. They should generally be completed and filed with the court within 42 days of the date of service of the divorce petition.
In addition to these forms, a number of other financial documents must be exchanged between you and your spouse. These documents, such as tax returns, income documentation, business documents, and bank statements, do not get filed with the court. Instead, you and your spouse share them by email, mail, or simply by handing each other copies.
Now that you know what mandatory financial disclosures are in a nutshell, let’s dig a little deeper into each of the required court forms.
Sworn Financial Statement and Supporting Schedules
The Sworn Financial Statement (JDF 1111) and Supporting Schedules (JDF 1111SS) list the income, monthly expenses, debts, and assets of each party. This document is intended to represent a “snapshot in time” of your current financial status. If you and your ex are still living together, you may think that it would be easier to complete one Sworn Financial Statement since your expenses are mostly shared. However, Colorado requires each party to complete and file their own Sworn Financial Statement.
Here are a few pointers for completing each section of the Sworn Financial Statement:
The first section of the Sworn Financial Statement contains information about your employment, how many people currently live in your household, what you believe your spouse’s current income is, and your and your spouse’s adjusted gross income from the last tax year. If you do not know this information, it is ok to say “unknown” rather than guessing.
This section of the Sworn Financial Statement is where you will calculate your gross monthly income from all sources: employment, rental income, interest and dividends, business income, etc. If you are looking at your pay stub to calculate your income, make sure to use the gross amount (before taxes are taken out) rather than your net pay.
Consider how many pay periods you have in a year to most accurately calculate your income. For example, if you are paid every other week, that is 26 pay periods (gross pay x 26 / 12 = gross monthly income).
This section asks you to list all the deductions taken from your paychecks, such as federal and state taxes, social security, health insurance, and retirement. If you are self-employed, you can still include deductions by estimating your self-employment taxes.
While there is a line item for child care expenses in Monthly Deductions, this is only applicable if childcare is automatically taken from your pay. Otherwise, you can list childcare costs in the expenses section.
Here, you will list all of your monthly recurring expenses. For some expenses, such as car payments, it will be easy for you to put an exact amount. For other expenses, such as groceries, you may choose to make your best “guesstimate” – and that is completely fine. If you and your spouse are still living together, you can include joint expenses.
For expenses that you don’t necessarily have every month like car registration, take the annual expense and divide by 12 to determine the monthly amount.
This section is for you to list all of your unsecured debts – think credit cards, student loans, and personal loans. Debts that have an asset attached, such as your car, should not be included in this section.
Review your current credit report to ensure all debts are accounted for.
Here, you will list all of your assets, whether they were obtained prior to the marriage or during the marriage. If you have retirement assets, investment accounts, miscellaneous assets, or separate property, you will need to use the Supporting Schedules (JDF 111SS) to list these assets.
Intuitively, you may think to list assets as marital or separate property based on how the asset is titled (i.e., a bank account in your name only). However, all assets are considered joint regardless of how they are titled unless the asset is your separate pre-marital asset.
Certificate of Compliance
This court form is a straightforward “check the box” form. It lets the court know that you have provided your ex with all the required financial documents (bank statements, etc.). If you have applicable documents, simply check the box, and you are good to go.
Watch: Everything You Need to Know About Divorce Financial Disclosures