I handle a lot of uncontested divorces and fairly regularly I get pushback from clients who weren’t expecting to have to go through the process of disclosing assets to their spouse as part of the divorce. I’ve written before about the disclosure process and why it is important from the standpoint of avoiding liability to disclose everything. But now I want to talk more specifically about how the disclosure process makes finalizing your divorce so much easier.
I understand completely why many people might initially think “I don’t have anything to split.” After all they don’t have a house and sometimes have modest retirement savings. In almost every case, people remember to list things once they have been confronted with a form requesting specific categories of information. In the typical uncontested case, people list bank accounts, credit cards, student loans, and a car. If they are feeling especially detail oriented they may list a laptop or some household items.
I understand that the average person doesn’t think about their debts when they are about to divorce but that’s why the process of exchanging disclosures is so helpful. It forces both sides to really think about what they have so that they can decide what their position is on how to split them. Most of the time the position remains the same after the exercise and they agree to not ask each other for anything. Other times disparities between the two disclosure forms can help identify points of disagreement.
Remember that this is your one chance to legally split up your assets and absent some serious mistake you aren’t going to return to court to update your agreement. Plus if you want to avoid paying an attorney a ton of money, one of the best ways to make it easy for your attorney to write up your agreement for submission to the court is to have a full list of assets together. Having a clear detailed document indicating how all these accounts are split can help avoid future disagreement over who is liable for which debts or who owns which bank accounts.
So before telling an attorney that you don’t have anything to split in your divorce consider all your bank accounts, credit cards, cars, and debts. You might have more than you think. Taking the time to consider your assets in detail prior to starting the divorce process is a great way to prepare yourself mentally for the steps involved.
For further reading about the disclosure process in a divorce, you can read some articles I posted previously.
This post explains in more detail the forms included with your declarations of disclosure and the sorts of information you want to include both on the forms themselves and in attachments. I also explain the importance of redacting forms that are going to be scanned and stored electronically.
This post gives an example of a case in which one spouse was found to have failed to disclose a significant asset in his disclosure forms, in this case, some large lottery winnings, and the penalty the court imposed. In this case the wife was ordered to pay the full value of her lottery winnings to her husband, instead of the 50% he would have been entitled to, because of her failure to disclose them. Her deception was discovered when a letter arrived at the Husband’s house mentioning the lottery winnings.