There is nothing worse than going through a divorce with the uneasy feeling that your spouse is not being honest about the nature and extent of your assets and debts. Alaska law includes procedures requiring both parties to a divorce to accurately disclose to each other complete financial information.
These procedures are known as the Initial Disclosures and are governed by Alaska Rule of Civil Procedure 26.1. Under this rule, forty-five days after the filing of the answer to a divorce complaint, the parties are required to exchange financial information such as tax returns and bank statements. Often, the information is redundant because the parties have the same access to the information. Sometimes you won’t have this information. For example, your spouse may have secretly moved all of your files out of the house. Or, you may have moved out without taking your financial records or making copies of them.
Either way, clients often tell me they feel they shouldn’t have to give their spouses detailed financial information about their lives after separation. Or they tell me that their spouse already has the information we are going to give to the other side.
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 express frustration at having to exchange financial information that is already known to their spouses. 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.
Unfortunately, the continued exchange of and demand for financial information is a fact of life during the time a divorce case is pending in court. 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 real property 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 about the parties to his/her spouse and both attorneys. 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/wife used money to control you or if he/she withheld money to punish or isolate you, then this may well be part of our case.
If you find the process to be upsetting and stressful, you should tell us. We can work with you to minimize the stress. Otherwise, it will be frustrating for you when we keep requesting information from you. It will also be frustrating for us when we are unable to obtain the information we need to adequately 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. You may feel like you are “giving in.” But, cooperation is the only way to go. The judge will demand it. You will save attorney’s fees by not arguing over what you have to give to the other side.
There is no completely painless way to complete the process. However, if you keep good records (see the suggestions below) then you should be able to give us the information we need to comply with the rules regarding the exchange of financial information. Otherwise, if we have to organize your finances and continually go back to you to 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 could spend at least a minimum of $2,000 for us to prepare our initial financial disclosures and possibly more.
CHECKLIST OF FINANCIAL RECORDS AND INFORMATION
Here is a list of the financial records and other information (known as Initial Disclosures) that you will need to provide to the other side:
A. Financial information.
- List of all real property including legal description and address.
- List of all debts; including name of creditor, balance, and repayment terms.
- List of all financial accounts open or closed for past two years.
- The name and address of the Plan Administrator for all retirement accounts.
- List of all personal property with estimates of value.
- List of all non-marital personal property with estimate of value and explanation of why it is non-marital.
- Information about your health insurance coverage
B. Financial records.
- Three years of tax returns.
- Three months of account statements for all banks, credit unions, brokerage firms or mutual fund companies.
- The most recent investment account statements for all non-retirement and retirement accounts.
- Three months of payroll information such as check stubs or pay statements.
- Copies of your most recent tax assessment or appraisal for all real property.
- A list of all debts and proof of all debts or obligations, including but not limited to copies of deeds of trust, promissory notes, or escrow statements, (for home loans) and account statements (for all other debts such as credit card or vehicle loans.)
Your spouse has the same duty to provide full and complete financial information. If you have an attorney, you can discuss what you think is missing or misleading or inaccurate. If you are self-represented, this is the time for you to consult with an attorney to find out how you can protect yourself.
Posted in: Divorce