People’s lives can be complicated. When a couple gets divorced, life often gets even more complicated. Many aspects of their lives need to be untangled, including finances. That means sharing and understanding financial statements, tax returns, and lots of other documents whether they are paper or electronic.
Often clients ask me, “What is the purpose of providing bank statements and all the other financial documentation?”
Short answer:
A person must know what they have and how they have historically spent money in order to make financial decisions that will determine their future.
Long answer:
In a traditional divorce, both sides have the right to request any financial information that they believe would be helpful to resolve the case. In contested litigation, just getting the necessary information can be a source of delay, frustration and excessive fees. In a perfect world, each attorney eventually gets the same information and then advises their client on the range of likely results if the facts were presented to a judge. Sometimes facts are “squishy” enough that either side can spin them to tell very different stories. Good lawyers will also help their clients assess the practical implications of the facts and the consequences of various interpretations of the facts and different settlement scenarios.
Looking underneath this – the quality of the analysis is directly related to the accuracy and completeness of the information provided. A good lawyer is going to hold off on advising his/her client until s/he has enough good information.
At Trinity Family Law, our approach is non-adversarial so the way we get information is voluntary. Both parties need data so that they can focus on the practical implications of the numbers. A person cannot access those implications until they have the whole picture. So we expect both people to provide statements for all of their checking, savings, investment and retirement accounts. There are a variety of ways to report the numbers; different people give different weight to different aspects of the settlement process.
Let me also clarify – a request for information does not mean that one person distrusts the other. We simply want to level the playing field so that both spouses understand their assets, income, and expenses. Our experience has been that rarely do both spouses have a complete understanding of their financial story, especially when it is complex and/or disorganized. It is our goal to consolidate all of the financial information from its many sources into a marital balance sheet that both parties understand.
