Getting divorced is never easy. In addition to the emotional pain involved in ending your relationship, you probably also have concerns about the custody of your children and fears about your financial future. And in the midst of all of this turmoil – your lawyer keeps asking you to find official documents and old financial records so that you can complete the process of financial disclosure.
“Seriously?” you’re probably thinking, “Can’t I skip this part?”
We wish we could say “yes,” but unfortunately, the answer is “no.”
First, in order to represent you, your lawyer needs to understand your entire financial situation. They cannot give you accurate legal advice and take effective actions on your behalf without reviewing all of your financial information, just as a doctor cannot prescribe medication without asking about your history and symptoms and conducting an examination.
Moreover, full financial disclosure is mandatory by law because, without it, spouses cannot fairly negotiate, litigate, or have any kind of productive discussions regarding their financial disputes. Failure to provide complete and accurate disclosure of your finances can lead to the court rendering an incorrect judgment against you and/or setting aside a divorce agreement.
Keeping track of all of your official financial records is a process you can’t avoid. Still, a little strategic planning can make it a bit easier and a lot less expensive.
This is how we guide our clients through the process:
1) Identify the Financial Issues and Required Documents
The financial documents you need to disclose are contingent on the legal issues in your case. While some law firms will hand their clients a generic list of financial records to find, at Benmor Family Law Group, we consult with our clients before they start to search for their financial documents. First, we clarify the financial issues involved in your case. Then we make a list of the documents and information that are needed to resolve your issues, so you do not have to waste time searching for irrelevant information. Next, we provide guidance on organizing the documents to reduce your legal fees.
2) Collect and Organize for Financial Disclosure
Next comes the part everybody dreads, searching their files to find the required financial information. We recommend scheduling a block of time where you can immerse yourself in the quest for finding those documents. Then schedule another block of time to organize the documents into two binders – one for you and one for your legal team.
Each binder should have a table of contents and several tabs. The table of contents should list each category of documentation, and there should be tabs for each category. For example, if one of the financial issues in your case is property division, then you would create a category for “Proof of Holdings.” Behind the Proof of Holdings tab, you would provide proof of all of your real estate and/or investment holdings.
If one of the financial issues in your case is child support, then your binder would have a category for “Proof of Income.”
You will need to provide proof of income for the last three years, so if you have three sources of income, then your binder may have nine tabs in this category. If this process were done by a lawyer, it could cost you $3,000 – $20,000. If you want to save money, then we strongly recommend that you take the time to locate and organize your documents in a binder with a table of contents and tabs for each category of information. It will enable your legal team to review, analyze, and assess your financial situation quickly, and significantly reduce your legal fees.
3) Analyze and Strategize
Once the binder is delivered to us, we review it. Then we meet with you. If you’ve been wondering (and worrying) about “What kind of support or settlement can I get?” or “What will I owe?” this is your opportunity to get a professional assessment of the potential outcome of your case and make important decisions.
For example, upon reviewing your documents, if we find that your house is worth $1,500,000 and the mortgage on it is $500,000. Therefore, the net value of the home is $1,000,000. Then we estimate that the real estate commission will probably be $50,000 + HST. Consequently, we can begin a negotiation to buy out the home for half of its net worth before deciding to list and sell it.
This simple example demonstrates how the financial analysis you receive can empower you to make informed strategic decisions about your divorce.
4) Reduce Stress and Costs
While everyone who is getting divorced would like to avoid financial disclosure, it simply isn’t possible. The best thing to do is approach the process in a logical, organized way. First, we recommend that you identify the financial issues involved in your divorce and the documentation that you will need. Next, schedule two blocks of time. Spend one block of time tracking down the documentation, and the second to assemble the documents you found into two binders.
The organized binder you give to your lawyer allows them to analyze your information quickly, thereby reducing your legal fees. Finally, meet with your lawyer to hear their analysis of your financial situation so you can make informed decisions about the next steps in your case.
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At Benmor Family Law Group, our multi-disciplinary team of divorce experts fully understands the emotional and financial impact of divorce. We will help you through separation, divorce, mediation, divorce coaching, and parent coordination, our full-service family law firm expertly supports you, guides you, and represents you – throughout your case.
