Mediation Preparation in Divorce

The financial aspects of divorce have all of the charm of an IRS Audit. 

In a divorce, both the assets and the debts of each spouse must be inventoried.   Each item in that inventory must then be analyzed for reasons that it may not be subject to division between the parties (e.g., will it matter when the item was acquired, was a gift or an inheritance, etc.).  Then, what will be an equitable split of the assets and debts that are subject to legal division is the ultimate issue.

To get through these steps, spouses must do quite a bit of leg work to gather all of the relevant materials.  Tax returns (including businesses), bank and brokerage statements, bills of sale, as well as documents that reflect pension information, mortgages, car/boat loans, business loans must be gathered.  Additionally, other items of value have to be documented – jewelry, art, cars, major electronics.   

In a divorce, just like any audit, it simply is necessary to obtain all the financial records.  Many people have not kept their records in a manner that is ready-made for a divorce.  Indeed, financial problems directly contribute to the divorce rate.  It simply takes time to ensure that all assets and debts have been identified and documented, particularly when spouses never considered that having records for all of these things would be needed. 

Simply put, once separation or divorce is contemplated or initiated, spouses need to begin the process of reviewing not the health of their finances, but rather reviewing the health of their financial documentation.

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