When it comes to finalizing a divorce, disclosure of information is of extreme importance.
Parties need to be open and honest with each other to ensure that everything is divided fairly and accounted for before everything is finished.
The State of Colorado requires parties submit financial affidavits and accompanying information to make sure that this disclosure takes place.
Exchange of Financial Information
In the State of Colorado, a mandatory exchange of financial information is required for every divorce case.
Each party has a strict duty to each other and the court to fully disclose all facts that could affect their rights and interests, and the interests of the children involved in the case.
The duty to disclose this financial information is considered an affirmative one, meaning that it needs to happen without the other party asking for it.
After 42 days from the filing of a Petition for Dissolution of Marriage or other motion that has been served, this financial information exchange must take place.
Sworn Financial Statement
Each party is required to provide a sworn financial statement to the other side.
This financial statement involves questions on monthly income, expenses, assets of the marriage, as well as debt.
The statement is a “sworn” document so it is imperative that parties are truthful and honest in their responses.
This information is used by the court to divide the marital property and debt, and it is also used when calculating child support.
While the information may seem a little too invasive at times, it is important that all of it is completed and given in a timely manner, along with accompanying documentation, discussed below.
Accompanying Financial Documentation
Along with the sworn financial declaration, the client also needs to supply quite a bit of financial documentation, including:
- The client’s most recent tax returns, including the most recent three years;
- Bank and financial institution account statements;
- Retirement plan statements;
- Business financial statements for the past three years;
- Personal financial statement documentation for the past three years;
- Proof of income, such as paystubs or W2s;
- Employment and education information;
- Real estate documentation for the marital home, including the home appraisal, title and mortgage documents;
- Any statements for debt, including loans, credit cards, etc.;
- Insurance documentation;
- Proof of investments and balance on each;
- Extraordinary child expense;
- Documentation on employment benefits, such as health and life insurance.
When it comes to income, it is important that all sources are reported. If the spouse has a second job or second source of revenue, that information must be disclosed.
For the most part, the above documents correspond to a line item on the sworn financial affidavit. Additional information may then be requested later, if the other side believes more documentation is needed.
What Happens if One Party Does Not Cooperate?
The court requires that all parties comply with disclosing financial information, but that does not necessarily mean everyone always cooperates.
Many times, a spouse may need to get additional information if there is a suspicion that something is being concealed or not disclosed, or if there are questions about where certain debts came from.
If that is the case, discovery techniques may be needed.
These forms of discovery can include interrogatories or questions the other side is required to answer, requests for production, requests for inspection, requests for admission, and even physical and mental examination of a person.
Keep in mind that all of these actions require a great deal of attorney time and effort, and legal fees come along with that work.
If one side is unfairly concealing information, and they need to resort to discovery techniques to get it, the other side may be forced to pay for the legal fees spent in trying to get this information.
It is for this reason that it is important that both sides comply as much as possible.
In addition, if a party does not cooperate and the court discovers that he or she failed to make an accurate disclosure, the party could also be punished in the division of marital assets.
Courts can even retain jurisdiction after the divorce is finalized to reallocate assets if it is discovered that misrepresentations or omission of important information occurred.
Courts can even impose monetary fines on a party who fails to cooperate and comply with accurately disclosing information.
Contact the Law Offices Of Kelli J Malcolm Today
Divorce is complicated and can be a stressful matter for anyone, and we are here to help you through the process. Call the Law Offices of Kelli J Malcolm today for your free 30 minute phone consultation at 720-261-7287.