What are a few of the assets which are frequently missed or inaccurate during a divorce disclosure? Why is it important to ensure attention to detail when completing financial disclosures during a divorce?
One of the first tasks one must complete at the outset of a Carlsbad or San Diego divorce is the disclosure of all known assets and debts. This isn’t just a list of what you might consider to be jointly held assets or debts. It is to be a full, transparent and accurate disclosure of any asset or debt owed or owned by either or both of the parties.
It is important to note that spouses owe each other a substantive legal obligation known as a “fiduciary duty” until the date of the finalization of a divorce. This means they must continue to act in each other’s best interest throughout the process of the divorce. Therefore, any attempt to hide money or assets or to knowingly undervalue or “overlook” an asset or debt will meet harsh judgment and often financial sanctions from the Court.
Are there assets which are frequently missed or inaccurate during a divorce disclosure? One of the most confusing issues for many former spouses is the disclosure of income surrounding the date of separation.
Community property is generally defined as any asset or debt attained by either or both of the spouses from the date of the marriage to the date of separation. After the date of separation, any income you earn is considered to be separate property. However, the actual date of separation in your divorce case rarely coincides with the final date of a payroll cycle. The day you receive your check is not the day you “earned” the money. Therefore, it is important to evaluate the paystubs around the date of separation to determine when you actually “earned” the money, not when you were “paid” the money.
This also applies to the accumulation of unused leave at work. Unused vacation or personal leave is another of the assets which are frequently missed or inaccurate during a divorce disclosure. Like the income example above, it is important to examine that portion of any unused leave which was accumulated prior to the date of separation versus that which was accumulated after the date of separation in your case.
Another commonly overlooked asset is accumulations in your mortgage escrow account. Mortgage companies generally establish an escrow or impound account to accumulate future tax and insurance balances. It is important to ascertain the balance in the escrow or impound account on the date of separation. If the family home is to be sold this will not be an issue. However, if either of the parties wishes to keep the family home they will need to offset the community interest in the escrow or impound account up to the date of separation.
Retirement and pension accounts, especially those of teachers and public employees and/or military personnel can be very challenging to accurately calculate and report.
This is why it is so important to work with the experienced Certified Family Law Specialists at Burke & Domercq. We help to ensure accurate, transparent and complete financial disclosures while helping you to properly account for assets which are frequently missed or inaccurate during a divorce disclosure.