Domestic Relations cases, or as we like to call them, DR cases, require a high level of intimacy with parties’ financial situations. DR cases require a detailed statement that reflects your financial situation and the disclosures to back it up. No stone goes unturned.
Generally, in my initial Client meeting, I explain and stress the importance of the financials. I also explain how incredibly annoying they can be. Countless times Clients have said to me, “Oh that’s no problem, I can get those to you real quick!” Nine times out of ten, that never happens. Financials are just downright burdensome. In order to help with the financial exchange process, I have created this blog.
Financials are imperative in the DR world. It helps attorneys determine things such as spousal maintenance, child support, property division, and debt division. Instead of choosing arbitrary numbers to assign debt to a party, we have the tool of disclosures to utilize the idea of equity when determining these things.
First and foremost, the financial exchange has a deadline. That disclosure deadline, despite popular belief, is forty-two days after the Petition is served on the Respondent. However, as a courtesy of the Court, financials are often due two weeks after the Initial Status Conference. Typically the Initial Status Conference occurs after forty-two days, but not always. The moment you file a Petition, or the moment you are served with the Petition, I recommend start gathering your disclosures.
The reason I recommend starting early is because it truly is burdensome.
Let’s Start with the Sworn Financial Statement
You can find the sworn financial statement on the Court website.
The Sworn Financial Statement is essentially the summary of all the documents you must disclose. The Sworn Financial Statement pulls apart your financial situation in order to create a clean, organized summary of how much you make, what you have left over at the end of the month, your property, and your debts. The Sworn Financial Statement examines these sections:
Not only do you have to include your gross monthly income you have to show where that income derives from. Does it come from your work, retirement, social security? A lot of people complain about the use of their gross income, but don’t worry, section two has you fill out all the monthly deductions from your paystubs.
This section can be fairly detailed. You are required to give as close to an exact amount you possibly can when it comes to your monthly expenses. Sometimes that is as simple as listing rent or a mortgage, and sometimes you have to average out that expense, such as groceries. Monthly expenses include, housing, utilities, groceries, healthcare costs, transportation, education, maintenance and child support, and a list of miscellaneous options.
Next come debts. It is big table where you get to fill in all your unsecured debt. This is only for unsecured debt. This includes items like student loans and credit cards. Secured debt like mortgages or car payments have their own section in the expenses and the assets section. So even though you have a mortgage or a car payment, your house and car are still considered assets.
This section although seems straightforward, has some detail that the other sections do not have. In this section, you mark how the asset it is owned, the estimated value, if there is a loan for it, and the net equity. This is also the section where you include your bank accounts and the amount of money held by them. Lastly, this section includes personal property, stocks and investments, retirement accounts, and any other type of miscellaneous asset.
Actual Documents are Needed to Back Up the Sworn Financial Statement
Now, it may seem easy to fill out the form and answer the questions, but that is not the tricky part. The tricky part is getting the actual documents to back up the sworn financial statement. A list of disclosures you must gather and exchange are found here – Mandatory Disclosures.
Get ready to put on your work gloves and dig for documents you know you should have saved. The checklist is fairly comprehensive. The Sworn Financial Statement is right at the top, so no thinking you can get out of it. The checklist includes documents such as three years of tax returns, three years of personal financial statements, and three years of business financial statements. The list goes on. Income documentation, real estate documentation, debt documentation, employment benefits, and just about any documentation you may have in your filing cabinet.
Financial Disclosures Require a lot of Homework
Attorneys like them just as much as their Clients do. After you gather all the disclosures, guess who gets to review them and familiarize themselves with them?
Not only do the financials help your attorney advocate the best result for your case, it is also mandatory. Despite what may happen in movies, the Colorado Courts make it difficult to secret away assets. The Court requires this exchange to avoid just that. It is incredibly challenging for attorneys to work on a case without having proper disclosure exchange.
When it comes time to do your disclosures, get ready and start early.
Christopher Nicolaysen is a Family law Attorney who practices in Colorado Springs, CO. He graduated from Denver Sturm College of Law, and has been practicing law for several years now. Christopher Nicolaysen is passionate about helping you solve your family matters. Learn more about his experience here.