Information – Why Do I Have to Give My Spouse the Tax Returns

One of the most common complaints I receive from my clients is that they feel that they shouldn’t have to give their spouses detailed financial information about their lives after separation. In some cases, they tell me that their spouse already knows what they property and debts they have.

Other clients feel it is an invasion of their privacy and that it is burdensome to have to assemble and provide us with financial information. They often express frustration at having to exchange financial information that their spouses already know. They may also find that the exchange of financial information is emotionally upsetting and stressful, particularly if financial issues were the focus of struggle for power and control in the marriage.

Why You Have to Exchange Information

Unfortunately, the continued exchange of and demand for financial information is a fact of life during a divorce. There is no way around it.

It does not matter that your spouse already has a copy of the tax returns; you are required to provide a copy to the opposing attorney. It does not matter that your spouse is a co-owner of all of the property; you are still required to list the property. It does not matter that although your spouse isn’t a co-owner, she or he knows what you own.

The good news is that you will benefit from the exchange of information. This process serves the purpose of ensuring that each party has fully disclosed basic financial information.

If you are the spouse who did not have control of the finances, you certainly want to know exactly what assets and liabilities you and your spouse acquired during the marriage. You also want to disclose your financial situation during separation, particularly if you are financially strapped.

If your husband or wife used money to control you, or if he or she withheld money to punish or isolate you, this may well be part of our case.

If you are finding the process particularly upsetting or stressful, then please tell us immediately so we can work with you to minimize the stress. Otherwise, it will be frustrating for you when we keep requesting information. It will also be frustrating for us when we are unable to obtain the information we need to prepare your case.

If you are the spouse who did have control of the finances, you want to disclose everything to eliminate any claim that you are hiding money.

There is no completely painless way to complete the process. However, if you keep good records, you should be able to give us the information we need. If we have to organize your finances and continually request more information, your case is going to become very expensive.

Unless you have the financial information listed below in a form that we can readily use, you will spend as much as $2,000 for us to prepare our initial financial disclosures.

Checklist of Financial Records and Information

Use this checklist to keep track of the financial records and other information we need to provide during your divorce.

Financial Information

We need lists of:

  • Real property, including legal descriptions and addresses
  • Debts, including names of creditors, balances and repayment terms
  • Financial accounts opened or closed for past two years
  • Personal property with estimates of value
  • Non-marital personal property with estimates of value and explanations of why it is non-marital

We also need the name and address of the plan administrator for all retirement accounts.

Financial Records

  • 3 years of tax returns
  • 3 months of account statements for all banks, credit unions, brokerage houses or mutual funds
  • Most recent investment account statements for all non-retirement and retirement accounts
  • 3 months of payroll information such as check stubs or pay statements
  • Copies of your most recent tax assessment or appraisal for all real property
  • Proof of all debts or obligations, including but not limited to, copies of deeds of trust; promissory notes; escrow statements and account statements (for debts such as credit card or vehicle loans)

Posted in: Divorce