Divorce-Financial Disclosure

03 Aug Divorce-Financial Disclosure

Many Montana family law attorneys have their clients fill out a financial disclosure form early on in the proceedings to give to the other side–why is that? Doesn’t your attorney have to help you keep as much of your assets as possible? Then why do you have to tell your spouse what your income, expenses, debts and assets are?

Montana REQUIRES spouses to disclose all of this information including valuations of any property that could be considered marital (remember the Funk case earlier this year!) in Montana Codes Annotated §40-4-253 and 254. The reasoning behind this is that marriage is considered by this state as an affirmative contract requiring the partners in the marriage to support one another economically, fiscally, physically, etc; when the contract (the marriage) breaks down, the duty to support not only may not have expired (one spouse may be entitled to post-dissolution maintenance formerly-known-as alimony at least for a period of time) but the property acquired during the marriage must be divided fairly. Regardless of whether one worked in or outside the home, the wages, salary, income the parties received during the marriage is considered “marital” in nature, i.e., belonging to both partners in the marriage. [pullquote3 quotes=”true” align=”center” variation=”red”]NO, your attorney cannot help you hide, dispose of, dissipate assets… [/pullquote3]
Thus, even if the parties are able to wind up and separate their financial affairs on their own, they still must disclose all of those important bits of information to each other. So, NO, your attorney cannot help you hide, dispose of, dissipate assets or otherwise allow you to deprive the other party of his/her rightful share.

The recent case of MARRIAGE OF JOHNSON, DA 1-192 which just came out on 7/3/12 is the latest to warn parties the consequences of not disclosing assets. This couple had divorced in 2003; in 2007, wife moved to set aside the Decree and the property distribution on the grounds husband failed to disclose a number of assets: farm and ranch property and equipment and a piece of land. Notwithstanding some evidentiary problems in the case, the District Judge awarded wife an additional cash equalization payment of over $69,000 based on the value of the undisclosed assets, with interest of 10% since 2003! The Supreme Court agreed the Judge had the discretion to make such an award.

Bottom line? Beware of trying to hide assets in this state.