A common question people ask us is, "How do I receive financial information from my spouse because I believe he is hiding assets." Another common question is, "How do I find out if my spouse has unknown debts and am I liable for them?" While more complicated cases and situations require more advanced legal tactics, here are the basics as to how to receive/retrieve financial information in your divorce.
Pursuant to the California Family Code, each party must submit financial declarations of disclosure to one another. These financial disclosures consist of: (1) Income and Expense Declaration- informing the other party how much income the spouse earns, from all sources, and what the spouse's monthly expenses are; (2) a Schedule of Assets and Debts- which lists all assets and debts a party owns or owes; and the spouse's last two tax returns with all schedules. While some other information is required to be disclosed, these documents will help you determine issues of spousal support, property division, debt division and possible payment of attorney fees by one party.
Discovery is a powerful tool to help locate financial information from your spouse. Discovery is essentially written questions and requests for documents that your spouse has to answer under penalty of perjury. The common forms of discovery are: (1) Form Interrogatories- Family Law- created to address common issues in a divorce such as income, assets, debts, children, reimbursements and attorney fee payments; (2) Special Interrogatories- where you can ask the other party to answer questions about issues in your case, i.e. issues related to finances, children, etc.; (3) Demand For Production of Documents- where you can ask, and your spouse must produce, documents such as bank statements, credit card statements, tax returns, etc.; (4) Request For Admissions- where you can ask your spouse to admit certain information is true and if certain documents are genuine. Correctly using these discovery tools will allow you to understand the financial status of your marriage and determine what a fair resolution will be.
Each court has Local Rules which also require financial disclosures when requests are made to the court for child support, spousal support or attorneys fees. Santa Barbara County (which includes Santa Barbara and Santa Maria courthouses) has Local Rule 1419, which requires the disclosure of tax returns, bank statements, pay stubs and business records. San Luis Obispo has Local Rule 2.8.2, which requires disclosure of the last two tax returns, payroll statements for the last 180 days, an income and expense declaration and profit and loss statements for the past 12 months, bank accounts from personal and business accounts for the last 12 months, 1099s, W-2s and K-1s received by the parties for the past two years, and various other financial information. These documents will help each party determine how much income is available to pay support or attorney fees.
When parties refuse to produce documents, or no longer have records in their possession, attorneys can serve a subpoena on third parties, corporations, banks, financial institutions and others to require the third party to provide records. This is commonly done to ensure your spouse is providing accurate information or if your spouse, or you, no longer have possession of records. Subpoenas are a powerful tool to help you understand your spouse's financial status, and keep them honest about their financial disclosures.
An attorney can depose your spouse or a third party. A deposition is where the attorney and your spouse (or a third party) sit in a room and answer questions in front of a court reporter who records all questions and answers under penalty of perjury. After the deposition a transcript is prepared which can be used in later court proceedings. Depositions have the element of surprise, meaning in written discovery attorneys and party's can carefully plot their responses to ensure the response helps their case, but in depositions there is no time to prepare for the question that is being asked, which must be answered immediately, on the record, under penalty of perjury. It is not uncommon for cases to be settled before or after a deposition because of the power they have.
Private Investigators/Independent Contractors
Private investigators can help discover inaccuracies in the other party's case and can develop useful facts to use in court. For example, we have used private investigators to follow parties saying they are attempting to work, but their daily activities show no efforts to work. We have used private investigators to determine people who claim to be sober while caring for their children are actually drinking while caring for the children. We have used private investigators to determine if people are hiding assets. Developing these facts with a proactive attorney can put your case in the best possible position.
Conclusion- A Consult With A Local Divorce Lawyer Is Always The Best Place To Start
Divorce law is a specialized field. You want a local lawyer who knows the judges and who only handles family law cases, especially when potential hidden assets or financial gamesmanship is being played. A free consultation with local family law lawyer will help provide insight as to what your strategy should be and how to maximize the effectiveness of that strategy to bring about the best results possible.