Good Records Cut Discovery Costs

After the initial shock that happens when a couple decide to end the marriage, very practical considerations come to the fore. One of the most important is the division of the marital estate. The couple, one way or another, must come up with hard numbers of what they own individually, as separate property, jointly as a couple, as well as what owe individually and together.

Depending upon the circumstances of the breakup, these numbers can be had by discovery, which is a very time consuming and expensive process whereby one party subpoenas the other requiring the production of records, or the couple can work together and assemble this records themselves.

The more wealth a couple has, the harder and more complicated the task becomes. Couples very often have everything they need to do this; however, frequently the records are not all in one place. Sometimes they are not up to date.

It may seem darkly comic, but a couple preparing to divorce needs the same financial records they would need if they were going to a financial planner to prepare for their so-called “golden years.” The same information is used to prepare a property settlement. On the asset side, this includes, but is not necessarily limited to, everything each owns individually as well as everything they own together; on the liability side, it includes, but is not necessarily limited do, everything each owes individually as well as everything they owe together. On the asset side, this means checking and savings accounts, mutual funds and money market accounts; real estate records, including the marital home and second homes and unimproved land; personal property, such as automobiles, furnishings, collections (art, stamp, coin); stocks, bonds, annuities, retirement plans, including pensions and profit sharing; accrued vacation time, medical savings accounts; other valuable personal property, life insurance and season tickets. On the debt side, this means records of credit cards, vehicle loans, mortgages and home equity loans, promissory notes, student loans and other debt.

It is a good idea for both spouses to have copies of all financial records — his, hers and theirs. Later in the divorce action, the assets and liabilities in these records will be classified as marital or separate — an important step in determining the size and eventual distribution of the marital estate. That cannot be done without the records, however.

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