One key to a smooth divorce is for both sides to provide information on everything from work schedules to retirement accounts. Find out what to expect when you are starting a divorce, and what financial records your divorce lawyer will need to resolve your case.
Financial Records Needed in Almost Every Case
When you walk into a divorce lawyer’s office, he or she uses interviews and questionnaires to begin putting together the puzzle pieces that make up your life. But to fill in the fine details, your divorce lawyer will almost always need certain records:
- Bank statements
- Credit card statements
- Utility bills
- Mortgage statements
- Pension plan descriptions
- Retirement account statements
- Insurance information, including policy numbers and premium costs
- W-2s or pay stubs
- Tax returns
There are also other records that relate to custody, spousal support (or alimony) and other issues, but they are beyond the scope of today’s post.
Many clients are hesitant to hand over this personal information to their lawyers’ office. Remember that lawyers are held to high standards of attorney-client confidentiality. While they may need your social security number, driver’s license number, and other personal identifying information, their professional license depends on protecting that information.
It is also in your best interest to provide these details to your attorney early in the process. Part of your divorce lawyer’s job is to review your overall financial situation and give you advice on the division of assets. This involves more than just arithmetic. He or she can help you identify and prioritize between liquid assets, like bank accounts, and other assets that may not be immediately accessible, like home equity, pension benefits, or retirement assets.
If you have a financial advisor, authorizing direct communication between him or her and your divorce lawyer can allow them to work together to give you guidance on how to make the most of your share of the marital estate.
What is Discovery and What Financial Records Will My Divorce Lawyer Be Able to Get from My Spouse?
In many families, one spouse handles the money and is primarily responsible for paying bills and managing savings. That can make it difficult for the other spouse to get necessary financial records. Even when spouses part on good terms, a long separation or a practice of maintaining separate accounts could mean there are details about your spouse’s finances that you simply do not know.
By law, the marital estate includes everything earned or incurred by either party from the date of the marriage to the date of the divorce. Some parties will agree to use a different date to divide the assets, such as the date of separation, but before you reach that agreement you need to know what you may be giving up.
Michigan law allows your divorce lawyer to send “discovery” to your spouse’s attorney. These questions (called Interrogatories), requests for documents, and other tools are designed to allow your family lawyer to gather information from the other side and get a more complete financial picture.
Discovery is a two-way street. As your lawyer gathers information for you to use, you should also prepare to answer similar questions yourself. These are verified statements, so you and your lawyer are required to do your best to provide complete and honest answers to the Interrogatories. You may also be asked to gather statements and other documents, sometimes going back several years. Work with your lawyer to balance the cost of attorney fees with your ability to access these documents yourself.
Getting Access to Lost Records
Over time, bank statements, pay stubs, and other documents can become lost. If your spouse refuses to produce them, or if he or she doesn’t have access, your divorce lawyer can issue subpoenas to the financial institutions directly. The responses to these subpoenas are objectively the strongest evidence of a family’s assets, but they often come with added expense. Your divorce lawyer may seek the records from your spouse’s attorney first, before incurring the cost.
Divorce is a paper-heavy process. Your divorce lawyer needs records for every financial aspect of your life before and after your separation. By cooperating with your attorney to gather this documentation, you can save yourself attorney fees and get the best advice about any possible divorce settlement.