Why Is Full Financial Disclosure Needed in Separation?

From your perspective, you may view negotiating a separation agreement with your spouse as lower stakes than if you were to be discussing a divorce settlement agreement. No matter what, though, this does not mean that full financial transparency is not essential. In short, if you or your spouse, intentionally or not, withhold or misrepresent financial information, it may undermine your entire agreement and lead to other, more serious legal consequences. So without further ado, please read on to discover the importance of delivering a full financial disclosure when crafting your separation agreement and how one of the seasoned St. Louis family lawyers at Stobie Family Law Group can help ensure your contract is fair and enforceable.

Why is full financial disclosure necessary for a separation agreement?

For a Missouri family court to deem a separation agreement as legally binding and enforceable, it must believe it to be fair and unconscionable. Therefore, to ensure this legal standard is met, they require each spouse to provide a full financial disclosure of their assets and debts. This way, each spouse may also make informed decisions when negotiating and settling on separation-related matters, such as property division, child support, and alimony. 

For this, both spouses must willingly exchange and review all relevant financial documents in their possession, including tax returns, bank statements, retirement accounts, loan agreements, etc. In turn, they must accurately identify which assets are marital property (i.e., acquired during the marriage) and up for division. This may be in addition to closely valuing this property to ensure the split is as equitable as possible.

Despite choosing to separate from your spouse, you may still place trust in them. Still, as a precautionary measure for your financial interests, you should have your hired lawyer review every financial record and proposed separation condition before agreeing to anything. And if we believe something is amiss, you may bring on a forensic accountant or financial expert to our team, who may investigate whether your spouse is only giving a partial financial disclosure. 

What happens if one spouse hides assets when settling a separation?

If our team has reason to believe that your spouse is hiding assets during the negotiation of your separation agreement, this process may take a serious turn. To put it simply, the Missouri family court does not take financial dishonesty lightly. For your spouse’s sake, the best-case scenario is that the court simply reopens your case. Here, it may redistribute property and modify child support and alimony terms that compensate for the time you were unfairly deprived of this financial security. 

A more negative outcome for your spouse, though, is if the court imposes sanctions for their misconduct. For one, they may be ordered to pay your legal fees and costs of hiring a forensic accountant or financial expert. Or, they may be held in contempt of court, which may mean incarceration until the assets are revealed. Lastly, if the court believes this was intentional, they may charge them with perjury or fraud, which similarly may result in fines and imprisonment. 

If you are tiptoeing around the idea of getting separated or possibly initiating a divorce, you should seek legal guidance from one of the competent St. Louis family lawyers from Stobie Family Law Group. We will help you understand which legal move, if any, is in your best interest. So please give us a call today.