September 4, 2019
FINANCES ARE AT THE HEART OF MOST DIVORCES – DO YOU KNOW ENOUGH?
Knowledge is power. If you and your spouse divide the labor in your marriage, the spouse who does particular tasks or has particular responsibilities usually knows more about those tasks and responsibilities than the other spouse. If couples divide marital tasks, they have to work extra hard at communicating if they want to stay up to speed on tasks assigned to the other. Most people aren’t that disciplined. If the task gets done, good enough.
Disparity in knowledge may not be a problem during the marriage. But if you decide to divorce, differences in knowledge can be a handicap if they occur in areas that are critical to the fair division of marital assets. Finances are a common problem area. The spouse who pays the bills and balances the bank account knows more than the other spouse.
But you want your fair share, and the law says you’re entitled to it. How do you know if you’re getting it?
New York law requires full financial disclosure in divorce. Parties must list all their assets, which are then divided by agreement or pursuant to the state’s equitable distribution statute. If financial disclosure is not complete, there are a number of options available to the court, and all of them involve negative outcomes for the non-disclosing party, so there’s a strong incentive to disclose assets fully and completely.
Full financial disclosure is available in all New York divorce processes. Litigation, mediation and collaborative law all recognize that financial knowledge is one basis for sound decision making in divorce, and financial information gathering is a threshold matter in all three processes (this assumes you are represented by counsel; if you are not, know you have the right to insist on financial disclosure). Typically the parties exchange net worth statements or the equivalent. There is opportunity to review the information together, analyzing it and gathering the supporting documents, with the goal that each spouse should have or attain a complete understanding of the couple’s assets and finances. Experts such as accountants and third-party neutrals may be useful at this stage to examine financial data and, if needed, to assist parties in understanding it. The principle of full financial disclosure is the same in all three processes. The process you choose will depend on your situation (your lawyer can help you with this choice).
The key thing to understand is that “knowledge is power” is as true in divorce as it is anywhere else, and that if you lack the requisite knowledge about finances or any other aspect of your marital assets, you are entitled to have it and there is impartial professional support available to help you understand it if you don’t already.
This post was originally published 1/22/19 on LazarandSchwartz.com