Question: How do I disclose my property? What is a Financial Statement?
Answer: Every person who has a case in family court that involves money and/or child support is obligated by the rules of the court to file and serve upon the other side a complete disclosure of your assets, liabilities (debt), income and expenses. This is done by completing and giving to your spouse or other party and the court a court form called a “Financial Statement”. There are two versions of the financial statement; one for people whose yearly incomes do not exceed $75,000.00 (pink form), and another for people whose yearly incomes exceed $75,000.00.
Note that the Financial Statement is most probably the single most important document you will file in a family law case. You are required to sign the Financial Statement under the penalties of perjury that it is a true and complete record of your income and expenses, assets and liabilities. We highly recommend that you hire a lawyer to prepare your Financial Statement on your behalf.
Question: What if I forget to disclose something on my Financial Statement?
Answer: It is extremely important to be thorough and accurate to the best of your knowledge and belief when completing your financial statement. However, there may be a time when you forget to include something. If you do, it is your responsibility to amend your financial statement immediately and file the amended statement with the court and serve it upon your spouse or other party in the case.
Failure to disclose income or an asset (for example, you are a potential plaintiff in a lawsuit of undetermined value that is being considered) can, if the judge believes you were trying to conceal its existence, expose you to serious court sanctions. Perhaps more damaging would be the loss of credibility in the eyes of the judge. If he or she believes you lied on purpose, they are not likely to believe anything you say going forward.
Question: What if my spouse and I disagree about the value of an asset?
Answer: Using case law that was decided in divorces and other civil cases, lawyers help guide judges to the most correct and fair answer to this question. Depending upon how complicated the asset is, lawyers may hire experts to help explain its value. This can become complicated (and expensive) when one spouse says the asset has little or no value, and the other spouse believes the asset is valuable.
This frequently happens when the parties own a house or houses. If one spouse feels the house is not worth as much as the other spouse, lawyers may choose a licensed real estate appraiser (rather than a real estate agent or broker). Another example occurs when one spouse owns a business or operates a corporation. Your lawyer will help you hire an expert witness to proffer a reasonable estimate of the value of your (or your spouse’s) business or corporate interest or real estate.
Question: I never earned income during our marriage, but I have been a stay at home parent. Will my spouse be allowed to keep more property in the divorce?
Answer: No. Not on this alone. Generally in Massachusetts, home making and child rearing are considered non financial contributions to the marriage and are seen as equal in value to a spouse’s financial contributions. However, courts in Massachusetts have found a spouse’s non financial contributions were much less substantial than the other spouse’s financial and/or non financial contributions, and awarded more property to the “super” contributor. See e.g., Williams v. Massa, 431 Mass. 619 (2000).
Question: My spouse and I bought real estate together before we were married, but title to the property is in my spouse’s name. Will the court divide that property?
Answer: Generally, an asset owned before the marriage by one spouse, and kept separate from the “marital enterprise” after the wedding will be awarded to the spouse who brought the asset to the marriage. However, the Probate and Family Court has broad “equity” power, meaning it can decide to allocate assets in a manner it sees as fair and reasonable under your particular circumstances, even for assets acquired in the name of one spouse but managed by the couple before and/or during the marriage.
Question: How can I make an Agreement to divide property?
Answer: We highly recommend that you hire a skilled attorney to analyze, negotiate, and draft your Separation Agreement. In Massachusetts, there are no “do-overs” when you and your spouse divide your property. You only get one chance to divide your property. If you change your mind after the judgment, there is almost never a way to go back to court.
Question: What if I find out after a divorce that my spouse did not disclose all of his or her assets?
Answer: This is the exception to the one time property division rule. If you learn that your spouse lied and did not tell you about property he or she owned, and committed fraud. Fraud is usually extremely difficult to prove, and unless it is for a large amount of money or property, you may wind up spending more to recover it than accepting the loss. For these reasons, it is always best to have a lawyer representing your interests.