1. Get Your Credit Report
A credit report will list all of your debts and amounts owed. By having your credit report when completing your financial disclosures you will have the list of assets and debts with values readily available to complete your financial statement.
2. Collect Current Statements
When getting a divorce in Colorado, the law requires that couples exchange financial disclosures. Before filling out your financial statement, take time to get copies of all of your current statements from every bank account, investment and retirement accounts, mortgage statements, auto loans, credit cards, insurance statements and any other accounts or debts you may have. You will find it much easier to fill out your financial statement.
3. Get Your Last 3 years of tax returns
The law requires that you exchange the past three years of tax returns when completing your financial disclosures. Your tax returns will show any increase or decrease in income, whether or not taxes have been paid in full, the sale of any major assets, and any other sources of income you may have.
Sometimes clients have a drastically good or bad financial year. By gathering 3 years of tax returns, incomes are often averaged for purposes of determining any support
4. Determine Asset Values
On your financial statements, you must list your assets and their value. You can use Kelly Blue Book to value your motor vehicles. You can determine home values by asking your favorite realtor to provide you with a current market analysis or have your home appraised. There are experts available to help value your business. Other experts can help you value retirement accounts if necessary. It is important to know that some retirement accounts have a different marital value than the amount that may appear on a current statement.
If you find you must file your financial statement before you have values, it is better to list the value as unknown than to commit to an amount that is uncertain. You can always amend the financial statement once you know the value of the asset in question.
5. Consider 6 Month Averages
A significant part of the financial statement is determining your monthly expenses. You will likely find these answers in your bank and credit card statements. As some costs vary each month, such as groceries, amounts you spend on clothes or medication looking at just the last month’s bank statements may not be an accurate number. Often we advise clients to look at the amounts spent on everything over the last 6-12 months and then use the average of the amounts you’ve spent for the financial statement.
6. Update and Supplement as Needed
As the Divorce proceeds you may need to update the financial statement and supplement your disclosures. Review your statements every 3 months to determine if matters have changed and you need to update or amend the financial statement.
7. Don’t Forget the Future
Just because your divorce is final doesn’t necessarily mean you won’t have to fill out a financial statement again someday. Child support can be modified when either parent has a 10% increase or decrease in their income. If maintenance is modifiable, your former spouse may ask the amount you are paying be increased, or you may want to go back to have it decreased or terminated.
By using programs such as mint.com you may be able better to track your assets and expenses on an ongoing basis. Especially when you transition from likely a dual-income household to a single income, maintaining a budget and monitoring your expenses and assets is very important to make your life easier moving forward.