Divorce is the process of legally terminating a marriage. This involves not only an emotional and physical separation of a couple, but also the division of their lives in every way, including financial. One of the most important components of a divorce is financial disclosure, as it ensures a fair and equitable resolution of the process. For more information and to secure skilled legal advice, reach out to a knowledgeable Middlesex County divorce lawyer today.
What is Financial Disclosure?
Financial disclosure is a mandatory process during legal matters, such as a divorce. It refers to the requirement that both spouses provide complete and accurate information about their financial situation. Pertinent information includes the following.
- All sources of income, including salaries, wages, commissions, bonuses, investment income, etc.
- All assets, such as bank accounts, real estate, retirement accounts, and other valuable personal property
- All debts, like mortgages, student loans, vehicle loans, and credit card balances
- Monthly expenses, such as rent or mortgage payments, grocery bills, car payments, transportation costs, clothing, entertainment, education, medical expenses, etc.
Each spouse is required to provide documents like sworn affidavits, pay stubs, bank statements, tax returns, loan papers, receipts, credit card statements, and more to prove the above information.
Why is Financial Disclosure Important in a Divorce?
The requirement for financial disclosure is strict, and every detail of an individual’s economic situation must be accounted for. But why is it so important?
Financial disclosure plays a crucial role in divorce cases because the legal process requires the couple to sever all ties. Marriage means that two people are intertwined in all aspects. Property that is accumulated during the marriage is jointly owned, shared children must be considered, and one spouse may owe the other financial support.
Total financial disclosure helps ensure the fair division of assets and debts. Massachusetts is an equitable distribution state, meaning that marital property and liabilities are to be divided based on what is fair, not necessarily what is equal. In order for a court to decide who is entitled to or responsible for what, there must be a clear picture of both spouses’ financial situation. Without total disclosure, one spouse may receive more assets than they are entitled to or walk away with more debt than they can manage.
Spousal and child support obligations are also important parts of a divorce settlement. These calculations are made based on the income and financial needs of both parties. If either spouse fails to properly disclose income or expenses, it can result in unfair support arrangements.
It is important to keep in mind that financial disclosure is legally required. Failing to provide accurate or complete financial information can jeopardize your credibility during your divorce case and lead to legal consequences. To learn more and secure skilled representation, reach out to a divorce attorney today.
