When I’m speaking to my clients about the Colorado divorce process, I hand them a stack of blank forms that they’re going to come across and eventually have to deal with. It feels overwhelming at first, but all of my clients have come back to thank me for making the process so transparent. Some of those blank documents include: a Separation Agreement; a Parenting Plan (if applicable); a blank Sworn Financial Statement; and the list of Mandatory Disclosures.
What are “Mandatory Disclosures” and what is a “Sworn Financial Statement”? Unless you’ve divorced in Colorado recently, these phrases are jibberish to you.
It’s important to first understand that Colorado law imposes an affirmative duty on a divorcing couple to truthfully, accurately, and fully disclose any and all assets and debts of the marriage. This includes both spouses, and separate as well as marital property.
An affirmative duty is an obligation to act in a certain way. The duty is on the person disclosing their own income, living expenses, assets, and debts – not the other way around. In other states, the process of determining the full boundaries of the marital estate is more like a treasure hunt. Wife spends all her time, money, and energy trying to discover and prove what Husband has; Husband spends all his time/money/energy trying to hide his. Or vice versa. That’s one of the great things about Colorado – you (and your soon to be ex-spouse) have a duty to be honest to the Court. If you lie, and the other person finds out, the Court will not be happy with you – and who wants a judge mad at them? I know I don’t.
So anyway, Mandatory Disclosures are a set of financial documents that each party must provide to the other. It includes (among other things) three years of income tax returns; bank and credit card statements; retirement plan statements; mortgage statements; and so forth.
A Sworn Financial Statement (frequently referred to as a SFS in shorthand) is one of those Mandatory Disclosures. It requires each party to itemize, in detail, income, monthly living expenses, debts, assets, and separate property. It is a beast, but it’s helpful and it’s required. The purpose of a SFS is to help give the Court a clear picture of each party’s financial standing during the dissolution of marriage process. Courts then these documents to establish a fair division of the marital estate, including maintenance (spousal support/alimony), child support, property, and so forth. It’s also what parties use to negotiate their Separation Agreement.
There is nothing about the financial disclosure part of the dissolution/divorce process that is optional, so be prepared. If you have questions about these forms, or anything else divorce-related, please email me at info@jessicawoodslaw.com or call at 970-470-2338.