Experts agree that “financial reasons” are the most commonly cited cause for divorce. Many times, one spouse handles the majority of the financial management during the marriage. The other spouse may feel confused, blind-sided, or cheated by the financial decisions the other party made.
Once they want to proceed with a divorce, they will need to take steps to gain a full understanding of the marital finances. This is imperative for the division of finances and to determine if any financial misconduct occurred. An attorney can help assemble all the necessary information necessary during this stage. However, there are also steps that the party should take when giving this intonation to their attorney for review.
If a party is concerned that their spouse is hiding money or used money inappropriately, the first step is to fill out a financial disclosure which includes a list of all known financial accounts, including bank accounts, credit accounts, loans, and investments.
Once a comprehensive list has been assembled, he or she should compile statements for each of the accounts for the past 6 to 12 months. The party should then do a line-by-line review to point out any unusual activity. It is important that the party do this initial review because the attorney may not know what is a typical expense for you. For example, if there is a payment for jewelry but the physical items are not disclosed by the spouse this would be a red flag for the attorney to conduct additional discovery.
Another thing to look out for on the statements is a reduction in the income of the other spouse. While this may be innocent, it could also signify that they have rerouted a portion of their income to a separate account.
Finally, the party should run a credit report to ensure that any accounts on the report are included in the division of assets and debts. The court will assume that the parties were aware of the accounts if the information was available at the time of the divorce.
Every person’s financial situation is going to vary. It is important that you consult an attorney to determine any additional steps that may be necessary for your particular situation.
More information can be found on this topic here:
• Divorce & Beyond Podcast, episode 311
• Take control, uncover the truth! Get the money you deserve in your divorce. Tracy Coenen