There are many requirements for disclosing information in your divorce process. Missing one could be catastrophic when it comes to division of the assets in your final agreements. Read on to find some strategies to try and mistakes to avoid.
The court requires that you complete a Sworn Financial Statement, very early in your case. See our Resources page for a link to the Colorado Judicial Department website for these forms. It is important to fill out the asset and liability disclosure forms correctly the first time. While it is possible to fill out and file these forms yourself, be very careful, because if you fail to disclose all your assets and liabilities, along with the correct values of such assets and liabilities, and all tax matters affecting your estate, you risk not getting an equitable and fair division of your property from the court. We recommend that you have your attorney work with you to fill out these forms correctly. You are also required to disclose numerous other documents, and to sign a form called, Certificate Of Compliance With Mandatory Financial Disclosures.
Here is a list of the financial information you may have to provide:
- Retirement Plans
- Income Tax Returns (most recent 3 years)
- Bank/Financial Institution Accounts
- Personal Financial Statements (last 3 years)
- Income Documentation (Pay Stubs, etc.)
- Business Financial Statements (last 3 years)
- Employment and Education – Related child Care Documentation
- Real Estate Documents (Appraisal, Title, etc.)
- Personal Debt (Loans, Title, Credit Card Statements, etc.)
- Insurance Documentation
- Extraordinary Children’s Expense Documentation
- Employment Benefits
At the Pearman Law Firm, we will assist you in correctly assembling the relevant documents, listing them accurately on the forms, and valuing them correctly the first time. Some strategies you may want to consider:
- Work closely with your attorney and CPA or accountant for accurate information.
- Rule of thumb: do not guess on values but get expert assistance when needed.
- If you do not have all the needed information by the time your initial financial disclosures are due pursuant to Colorado Rules of Civil Procedure Rule 16.2 (C.R.C.P. 16.2), you should put “unknown” in the columns and then amend the document later with correct information. Do not list bad information on the form just to meet a deadline.
- Be careful to not overstate or understate your income on the SWORN FINANCIAL STATEMENT. On the income section of the forms, you must be very careful as to what you list as income. Many variables can complicate this issue. Sole proprietors are at substantial risk of the court not using an accurate income number. Both gross receipts and net revenue need to be considered. Salaried individuals need to consider bonuses as part of their income; also in-kind distributions (company car, etc.). Knowing how to list these specifics on the Sworn Financial Statement is crucial to have an accurate picture for the court. Commission based earners need to be particularly aware of assessing their income as they have fluctuations in income. Averages will need to be calculated to have a good picture of your financial situation.
To avoid complications and potential devastating financial outcomes, consult your attorney throughout this process. It will dramatically impact your financial situation after the divorce.