.When you and your spouse start divorce proceedings, you need to make financial disclosures. These are legal documents you fill out with financial information about your personal assets and debts, and the marital property to divide during the divorce or legal separation.
You must complete these documents even though both you and your spouse have access to the same information. The judge uses this information to make an equitable division of marital property. Couples often disagree about what is community property and what is separate property. Financial disclosure helps determine the division of property.
State laws determine the specific information required in a financial document. This article reviews the most common items you and your spouse must provide. It also answers some frequently asked questions about property division in a divorce case.
The Financial Disclosure Forms
Each state, and sometimes each county, has its own financial disclosure forms, sometimes called a “statement of assets and liabilities." There may be an additional sheet called an “income and expense declaration" (also known as a "financial statement" in some states). Even if your spouse has access to all the same information, you still have to complete these forms and send them to your spouse.
Assets and Liabilities
This form tells your spouse and the court the money and property you have (assets) and the debts you have (liabilities).
This form may include:
- Real estate (whether separate or marital property), the current market value, and the amount owed
- Household furniture and appliances
- Jewelry, art, and antiques
- Vehicles, boats, and recreational vehicles
- Bank accounts (whether joint or separate)
- Stocks, bonds, pension plans, and profit-sharing plans
- Student loans
- Unsecured loans
- Credit cards (including balance owing)
- Other outstanding debts (including type of debt, creditor, and balance due)
The financial disclosure must list all assets and debts. Couples often get into trouble during the divorce process by failing to include items on their financial statements, believing their spouse has “all the bank statements" at home.
Income and Expense Form
The income and expense declaration is the document the court uses to help determine the amount of child support and spousal support (or alimony) in the court order. The income and expense declaration is an estimate, supported by pay stubs and tax returns. When filling out divorce papers, be realistic about your income and expenses. Don't pad expenses or trim your income, thinking it will help with the settlement agreement.
A typical income and expense form will ask you for:
- Employment information (including your employer's name and address, gross income, and occupation)
- Education (and whether you have any graduate degrees)
- Tax information
- Income information (including gross wages, overtime, investment income, self-employment income, and external sources such as spousal support)
- Number of dependents or contributing household members
- Average monthly expenses for housing, food, utilities, transportation, insurance, healthcare, and entertainment
- Installment payments and debts
- Child support information, number of minor children, childcare costs, and health insurance information
- Other hardships such as disabilities, recent major losses (due to fire, flood, etc.), and minor children not from this relationship
- Attorney fees and costs
Unlike the assets and liabilities worksheet, you file your income and expense declaration with the court.
If you and your spouse are filing a summary dissolution or have already agreed on how you will divide your assets and liabilities and have a written separation agreement, you may be able to avoid these steps. Some states may still want an income and expense declaration for administrative purposes.
Division of Marital Property: Assets
Marital property is all property acquired during the marriage, or that was substantially improved with marital assets. For instance, if the house is in your name but was remodeled during the marriage, your spouse receives a share of the increased valuation of the property. How your property gets divided depends on whether you are in a community property state or an equitable distribution state.
Community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) divide marital property 50-50. Each spouse gets half the total value of all property. In the remaining states, each spouse gets a fair share of the property. For example, one spouse might receive the house because they will have primary legal custody of the children. The other spouse receives the couple's boat and RV in compensation.
Separate property is all property owned before the marriage and anything obtained by gift, inheritance, or purchased with separate funds. Personal injury awards may be separate property unless they include wage replacement. Your spouse can receive part of your pension and retirement plans through a court order called a Qualified Domestic Relations Order (QDRO). Your attorney will let you know if you need a QDRO. Not all attorneys draft this special type of order. So, your attorney may refer you to another attorney who can draft and submit it to the court.
Division of Marital Property: Debts
Like assets, the state determines the division of debts. Community debts belong to the community. Credit cards used by both spouses are community debts. If you know one of you made unusual charges, you can ask the judge to assign that charge to the spouse who made it.
Any separate debt remains the property of the individual who acquired it. If each of you had a credit card during the marriage, you each would be responsible for your own cards. If you can show that you made unique purchases for the benefit of the community, such as putting the bathroom remodel on your card, the judge may divide that debt between you.
If you and your spouse have an uncontested divorce, you both agree to divide your property as described and can write your own settlement agreement. Or you can write it with legal advice from a family law attorney. If you cannot agree, you must ask the judge to divide your property. The judge will need supporting documents to determine how best to equitably divide the marital assets and debts. You will need to provide:
- Federal and state tax returns for the past three years
- Bank account statements for the past 12 months
- Utility bills, phone bills, internet bills, and other household bills
- Deeds, mortgages, and notes for all real property
- Titles for vehicles
- Copies of insurance policies, pension plans, retirement plans, 401(k) plans, etc.
If you are contesting any claims made by your spouse (for instance, a charge on a credit card statement you did not make), you should note that and include an explanation for the judge.
Waiver of Filing Fees
If you don't have enough money to file or aren't sure if you do, you can file a Request to Waive Court Fees. This is another document that asks for a financial disclosure and supporting documents. It lets you file your petition and get a case number. The clerk will review your case and decide if you qualify for a fee waiver, need to pay the full amount, or can make partial payments over time. The court website or the legal aid department can give you more information.
Child Support and Spousal Support
In most states, family courts handle child support and child custody separately. You and your ex-spouse must agree on a parenting plan and visitation (also known as "access") as well as matters about support payments.
In almost all states, judges calculate child support using state-mandated guidelines. States base these on parental income, the amount of time the child spends with each parent, and the cost of living in each state. Federal regulations require all children to receive support from both parents equally, regardless of their parents' desires. Parents may not waive child support or agree to a lower amount unless a judge signs off on such a figure.
Spousal support, or alimony, is not guaranteed in all states. Most states only order spousal support for:
- Long-term marriages (over 10 years)
- A brief period so that a lower-earning spouse can obtain education or training
- A transition period, while a lower-income spouse finds new housing or employment
- For older or disabled spouses in very-long-term marriages, where employment is unlikely or not possible
Judges have great leeway in the duration and amount of spousal support awarded and its termination or limitations. A request for spousal support must include supporting documents for its necessity.
Q: Do I need to file a financial declaration in a no-fault divorce?
Yes. A no-fault divorce has to do with the grounds for a divorce. You are saying that nobody was responsible for the divorce—you had “irreconcilable differences." You must still divide your property. Filing a fault divorce (or a contested divorce) may affect the property division. Divorce laws in some states permit the filing of a fault divorce. You will need to consult a divorce attorney for more information.
Q: Do I need to file a financial disclosure for an annulment?
Maybe. It depends on the requirements in your state and county jurisdiction. Unlike a divorce, which ends a valid marriage, an annulment declares that the “marriage" was never valid from the beginning. If you had reason to believe the marriage was valid and are the "putative spouse," you may have rights to the community or equitable property. If you both knew the marriage was invalid, you will have to divide the property between yourselves.
Need Help With Your Financial Disclosure? Get in Touch With an Attorney
The time between the petition and the divorce decree is filled with paperwork. Completing and filing paperwork is something nobody should do alone. Contact an experienced divorce attorney in your area to help you do it right the first time. You don't have to do the hard work alone.