By Rebecca Day, Esq.
You have heard the phrase “knowledge is power,” but in the divorce process a more applicable phrase would be “financial knowledge is power.” New Jersey is a no-fault divorce state, so the courts are less concerned with who is cheating and more concerned with who is paying the mortgage. From a financial perspective, a divorce involves dividing marital assets and liabilities via equitable distribution and assessing the need for spousal and child support. The court needs an understanding of the parties’ property, debts, income, and expenses to do so. A party that has a firm grasp of this financial information is in a better position to present this information to the court. The party may also spend less time and money engaging in discovery and is better equipped to realistically evaluate settlement proposals.
First, you should inventory what financial knowledge you already possess. A good starting point is to review the Case Information Statement (“CIS”), which can be found at the court’s website (https://www.judiciary.state.nj.us/prose/10482_fam_cis.pdf). This document must be filled out in all contested divorce actions and many uncontested divorce actions. It contains sections on income, expenses, assets, and liabilities. After reviewing the CIS, you can begin collecting information and documents to fill in any sections that you are missing. For the income section, collect your paystubs and W-2s (or comparable tax documents). For the expense section, gather your utility bills and bank and/or credit card statements so that you may accurately estimate your monthly spending. For the assets and liabilities section, begin to gather title documents for assets and loan statements.
Tax returns also contain a wealth of information that may be helpful in pursuing a divorce and in fact, the CIS requires you to attach your most recent tax return. Many times responsibility for filing tax returns falls upon one party during a marriage. Consequently, the other party lacks knowledge of and easy access to the tax returns. However, a party lacking financial knowledge can request past tax returns (for a fee) and transcripts of past tax returns (no fee at this time) from the IRS. Additional information on obtaining copies of filed tax returns and transcripts of filed tax returns can be found here: https://www.irs.gov/uac/Newsroom/How-to-Get-a-Transcript-or-Copy-of-a-Prior-Year-Tax-Return. It takes some time for these requests to be processed and not all years are available, but this is a great tool to gain some more financial knowledge.
If you are contemplating divorce or have already initiated a divorce action, do not forget financial knowledge is power. If you have any questions about this topic or any other topic related to family law, please do not hesitate to contact our office.