Prenuptial Agreement Financial Disclosures

The purpose of a financial statement is to list your income, assets, and liabilities. A financial statement can help couples plan for events such as buying a home, having a baby, or starting a business. It is also helpful in preparing for prenuptial or premarital agreements.

This article explores a few elements of financial statements. It also provides a sample statement to help you get started. This sample is a starting point. Seek advice from an experienced family law attorney as you prepare your statement.

What Is a Prenup Financial Disclosure?

Financial statements help describe each person’s financial information upon entering the marriage. These legal documents give future spouses and their attorneys a clear view of the available resources and obligations. Each fiancé(e) prepares and shares their own disclosure statement.

A full financial disclosure can serve both logistic and emotional purposes. You might have discussed financial matters before your engagement, but it can be helpful to see everything on paper. The goal is to start building your shared plans and prenup with full transparency.

This disclosure can give both people peace of mind before becoming legally intertwined in marriage. Sometimes, partners make assumptions about the other’s finances while dating — only to discover they were wrong after the wedding. If one partner has undisclosed debt, it may become a shared debt through marriage. These statements can prevent the shock of significant hidden wealth or debts.

A financial disclosure does not automatically classify your assets and debt as separate property. The other elements of your prenup can list what you consider separate versus marital property.

How To Disclose Your Finances to Your Fiancé(e)

A financial disclosure is more sophisticated than a spreadsheet of your bank accounts. It is a specific type of legal document. You must follow the requirements to ensure your prenup would have enforceability in a divorce.

Gather Your Documents

The first step in preparing a financial statement is gathering all your documents. Make a list of all the financial institutions you use, including credit unions. Get your bank account numbers from each one. Get detailed information if you have loans, such as a mortgage, car, or personal loan. You must know the amount you owe and the interest rate you pay.

Find your tax returns from the past few years. If you have credit cards, know the names of each creditor, the amount you owe, and the interest rate you pay. Know the monthly amounts you pay for all your bills. List your property taxes on the financial statement if you own your home.

Get appraisals for tangible, physical property, such as antique furniture, artwork, or jewelry. An appraisal will help you determine the fair market value for these items.

Use a Worksheet

Once you have gathered your documentation, create a worksheet. Use a separate sheet of paper to itemize your assets and liabilities. Be sure to include things like alimony and child support in your calculations. Add up your assets and your liabilities.

Once your calculations are complete, you can calculate your net worth. Subtract your liabilities from your assets. The remaining figure is your net worth. Use this information to draft a financial statement for professional review.

Include an Affidavit

Financial statements are often part of financial or legal matters. Verifying that a person is telling the truth about their finances is necessary.

You can include an affidavit at the end of your financial statement or prenup. Under penalty of perjury, you must certify the truth and accuracy of your statement in the presence of a notary public.

Sample Financial Disclosure Template

 The following example illustrates what you might include in your disclosure statement. To complete it, you might review your tax forms, credit card and bank statements, pay stubs, and other documents. Use this information to estimate your current income, bills, and spending amounts as closely as possible.

Get legal advice from your family law attorney during this process. They can help you draft an agreement with disclosures that follow state laws.

Do Laws Require Financial Disclosures Before Marriage?

State laws set marriage requirements, but you generally don’t need a financial statement to get married. Rather, some states require it for prenuptial and postnuptial agreements. In states where it’s not a requirement, including one is still a good way to protect your prenup’s enforceability.

Regardless of whether you have a prenup, misleading your fiancé(e) about finances can still have legal consequences. For example, California courts may rule a marriage invalid due to fraud if you hide or lie about a significant financial obligation. For example, a partner might conceal spousal support payments from a prior divorce. Such rulings are annulments, which typically don’t offer the same property rights as a divorce.

How Does a Financial Disclosure Affect Divorce?

In the event of a divorce, your financial statement can have a few benefits. As a key part of your prenuptial agreement, it is among the early factors to consider in the divorce process.

First, it can help you prove whether your prenup is enforceable. Full disclosure is one factor that determines if your agreement will hold up when the marriage ends. If your spouse only gave a partial financial disclosure, you may argue the prenup is invalid. If you both gave a full disclosure, you might argue in favor of the prenup’s validity.

Second, it could play a minor role in property division. This document records a snapshot of the assets and liabilities each person brought into the marriage. It doesn’t guarantee you’ll have a right to keep all your original property. Your prenup and state laws may specify a different arrangement. Yet, it could be a useful reference when negotiating a settlement or contesting assets in court.

Get Help for Your Prenuptial Agreement

Mixing money is a complex matter. Accurate and complete disclosure from you and your partner is imperative. An experienced local family law attorney can help you prepare a financial statement.