As soon as the court acquires jurisdiction over two parties in a divorce proceeding, Colorado law requires both spouses to complete a financial affidavit and provide the other spouse with full financial disclosures.
Each party is required to provide the other side with a sworn financial statement, which includes a detailed itemization of the individual’s monthly income, income deductions, monthly expenses, debt, and separate property. The purpose of this document is to give the Court a clearer picture of each party’s financial standing during the process of dissolution of marriage. Courts will use these documents to determine a fair division of the marital estate, as well as child support, maintenance, and so forth. Parties also use the sworn financial statement to negotiate their separation agreement.
Apart from the sworn financial statement, each side must also provide the other party with specific financial documents. These include tax returns, as well as personal business financial statements that go back three years. Other documents that need to be turned over are documents that identify and show the current value of bank accounts, retirement accounts, investments, and pensions, as well as those that evidence ownership in real estate. Documents that show the balance and payment terms of any debt must also be disclosed.
These disclosures are made early in the divorce process, and do not need a formal discovery request from the other party. The court sets deadlines by which these disclosures must be submitted. Typically, mandatory financial disclosures must be submitted 42 days from the date that the Petition for Dissolution of Marriage or Legal Separation is filed.
In a divorce proceeding, it is crucial that such disclosures are accurately and carefully prepared. If the court determines that one party failed to make an accurate disclosure or withheld information, he or she may be penalized in the process of asset division. The court may retain jurisdiction for a five-year period after entry of the final divorce decree to rearrange assets that were the subject of omission or misrepresentation. In particularly egregious cases, the court may opt to impose monetary sanctions on the party who failed to properly make a financial disclosure.
As such, it is in your best interests to prepare all forms and gather the essential documents with the assistance of a knowledgeable attorney who understands what the court demands.