There are several important steps you should take when preparing for divorce. Ideally, you should take these steps before the divorce proceeding actually begins. These steps will save you money and will position you to achieve a more favorable outcome. Its part of strategic divorce planning.
I will discuss various aspects of preparation in subsequent posts. In this post, I will talk about obtaining and safely storing financial records.
Usually one spouse has more responsibility for keeping and maintaining family financial records. If you are the spouse who does not do this, you could be at a disadvantage when it comes to divorce. Before the divorce proceeding starts, you should obtain copies of the following kinds of documents:
1. Checking account records, including the checkbook ledgers, checking account statements, and canceled checks or check carbons;
2. Federal and state income tax returns for the past several years, plus all attachments and schedules, and all of the information that was used to prepare the returns;
3. Paycheck stubs, bonus check stubs, and year end W2 and 1099 statements;
4. Credit card statements;
5. Cell phone bills;
6. The deed or title to your homestead and any other real property and sale closing documents;
7. Receipts relating to the purchase of big-ticket items;
8. Loan statements;
9. Any other financial documents that might be important.
During a Minnesota divorce proceeding, there is a formal, legal way that an attorney can obtain copies of these documents. Its called “Discovery.” I will write more about that later.
There are two problems with discovery: 1. it can be expensive; and 2. its often difficult to get copies of documents that the other side has already destroyed. Some documents can be obtained directly from a third party. An example of this is a summary of your tax return, which can be obtained from the IRS. Some documents cannot be obtained from any source. For example, a check book ledger is a good source of financial information, but once a spouse has destroyed it, its gone.
You should not obtain documents illegally. But, most couples keep their financial records in a place that is accessible to both parties.
Even if you are not expecting a problem divorce, you should get copies of these documents. Things change, and when an otherwise agreeable spouse realizes that you want (and are entitled to) a portion of his or her retirement savings, he or she might become less agreeable. Put copies of these documents in a box and store them somewhere that your spouse cannot get at them. Maybe store them in the basement of your best friend’s house, so that you have them when you or your attorney needs them. Store them at your parent’s house or in a safe place where you work. Put them somewhere that your spouse cannot get at them and destroy them.
This simple step will save you time and money.