When Florida couples begin the divorce process, one of the most stressful and highly debated elements of the divorce case is the issue of finances. Unfortunately, many couples fail to be proactive in financial planning before the divorce, which exacerbates stress and tension once the process has begun. What makes matters worse is the fact that many couples overlook financial accounts or assets that should be included in the divorce negotiations.
The most important element of finances for divorcing Florida couples to remember is that full disclosure will save time, stress, and often money. One of the lengthiest portions of any court case is the “discovery” phase, where attorneys gather important information relative to each party’s case. Couples who are prepared with necessary documents and who are willing to fully disclose assets and debts are likely to find the discovery phase much shorter and less expensive.
In order for Florida couples to fully disclose their assets and debts, they must first understand what information is expected. The most commonly sought financial documents in Florida divorce cases includes:
- The three most recent year’s tax returns
- The three most recent month’s income statements or pay stubs
- W-2’s and 1099’s from the past year
- Investment Accounts
- Bank account statements
- Trust Agreements
- Retirement plan statements
- Life insurance policies
- Loan documents, lease agreements, and property deeds
It may take time and patience to accumulate all this information, but it is extremely important to do so as soon as the decision to divorce is made in order to avoid unnecessary fees and expenses. If you are unable to secure the information on your own, ask your attorney for help, or consider hiring a financial analyst.
Financials that are often Forgotten
Several financial elements are often left out of divorce proceedings, even though they may be relevant to the process. As mentioned above, retirement accounts and life insurance policies are very important considerations during divorce. There are also financial elements to divorce that should be discussed before the process begins in order to set the tone for the financial elements of the divorce, such as:
- Credit Rating – Obtaining your credit report before a divorce is an excellent way to avoid overlooking open accounts or debts, and will help you create a picture of your overall finances.
- Taxes – If you or your spouse incurred income tax debt during the marriage, either or both of you may be held responsible for paying off the debt. The IRS can conduct an audit on tax returns filed jointly for up to seven years after it was filed. During divorce, taxes should be an important concern, including who will be responsible for debt should an audit reveal one.
- Children’s Accounts – If you or your spouse opened a checking or savings account for your minor children during the marriage, keep in mind that they are applicable financial considerations during divorce. Even though children’s accounts may not be included for tax purposes, they should be considered relevant for full disclosure.
While the financial elements of divorce may seem overwhelming, with the right balance of patience, cooperation, and disclosure, divorcing couples can successfully dissolve their union with financial stability for both parties.
If you are contemplating divorce and want to learn more about how it may impact your finances, contact the Law Offices of James S. Cunha, P.A. for experienced and skillful guidance. You may call our office at (561) 429-3924 to schedule a consultation. Our practice serves clients in a wide array of family law matters in West Palm Beach, Palm Beach, Jupiter, and Wellington, and throughout Palm Beach, Broward, and Martin Counties.