New Jersey law requires full transparency during divorce proceedings. This includes total financial disclosure on the part of each spouse. The importance of financial disclosure in a divorce cannot be understated, as it acts as the foundation for the court’s ability to make fair and equitable decisions. If you are filing for divorce in New Jersey, understanding the role that disclosure plays is crucial in protecting your rights and future. To learn more, continue reading and speak with a knowledgeable Sparta divorce attorney today.
What Does Financial Disclosure Mean?
In terms of a divorce proceeding, financial disclosure is the process where each spouse provides a detailed account of their financial situation. During the discovery phase of the divorce, both spouses must provide various financial statements, like sworn affidavits, tax returns, property deeds, pay stubs, bills, and more, to prove what their financial situation looks like. Pertinent information includes the following.
- Income: Salary, bonuses, commissions, and any other sources of income like rental properties, investments, or business earnings
- Assets: Bank accounts, retirement accounts, real estate, vehicles, life insurance policies, and other valuable personal property like artwork or jewelry
- Debts: Mortgages, credit card balances, student loans, personal loans, and any other liabilities
- Expenses: Monthly living expenses like rent, utilities, transportation costs, groceries, insurance premiums, etc.
What is the Importance of Financial Disclosure in an NJ Divorce?
As in many other states, New Jersey requires full financial disclosure for both parties in a divorce. But why is it so important?
Financial disclosure serves a variety of purposes during a divorce. One of the most important is to ensure the fair division of assets and debts. New Jersey is an equitable distribution state, meaning that during property division, assets are distributed between the parties based on what is fair and equitable, not necessarily equal. Courts take into consideration a variety of factors when determining what would be equitable, including each spouse’s income and earning capacity, age, health, contributions made to the marriage, and more. Without full financial disclosure, it would be impossible for the court to make an educated decision and ensure that each spouse is given what they are entitled to.
The same can be said for alimony and child support. Alimony, or spousal support, is often awarded when one spouse has a significantly greater earning potential than the other or when one spouse made sacrifices or contributions to the marriage. NJ courts use financial information to assess a spouse’s need for alimony or child support and the other spouse’s ability to pay it. Having financial disclosure helps make sure that a child support and alimony order is created based on an accurate depiction of each spouse’s financial situation.
In general, full financial disclosure ensures that the spouses are abiding by the law and avoiding decisions based on fraudulent information. If one spouse hides assets, there can be substantial legal repercussions. To learn more and secure skilled legal representation, reach out to an experienced attorney today.