In most counties, the trial courts make parties fill out financial declarations shortly after filing for a divorce and exchange it with the other side. These forms cover everything from income to weekly bills and assets and liabilities. Most litigants reel at this fact because the form takes some time to complete. However, the courts are doing parties a great favor by this mandatory “informal” discovery because it saves time and expense later, as it gives each divorcing party a rough financial snapshot of the expenses of the other. This blog briefly covers the “why” of financial declarations.
While each spouse may have some general awareness of the other’s weekly bills and assets and liabilities, others do not. For this reason, sometimes financial declarations provide shocking insights to the other spouse that things are not as rosy as they seemed. Knowing this information early in the divorce can level expectations of a divorce windfall and avoid spending even more money (unnecessarily) informal discovery. Formal discovery is a process by which the attorneys send questions and request for documents to parties and document requests to third parties. If the total marital estate is limited, this may not make sense.
On the other hand, a financial declaration may reveal assets (or liabilities) for spouses who kept separate accounts and had no idea about. Given Indiana is a one-pot theory state, meaning the court takes everything you had at the time of marriage, acquired during the marriage, and until filing and presumes an equal division, a financial declaration may provide key insights into where to look for assets and accounts. Again, this is but another reason most courts require financial declarations.
In short, while financial declarations have limits, they provide the parties with “free” discovery and a place to start in assessing the marital estate, discovery and a trial theme. In other words, these tools provide a roadmap of the marital estate and how to move forward. While they are time-consuming and may provide little insight for the spouses who intermixed assets, they can provide (and often do) valuable insights into how to litigate the case. In modest marital estates, they may help the parties come to terms with the fact their lifestyle is going to diminish. The key takeaway from this blog is financial declarations are important and you should take care in accurately completing this form.
This blog on the “why” and purpose of financial declarations was written by attorneys at Ciyou & Dixon, P.C. who handle domestic cases of all types throughout Indiana. It is written for general educational background. It is not a solicitation for services of legal advice. It is an advertisement.