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Home / Family Law / WISCONSIN DIVORCE LAW: FINANCIAL DISCLOSURE IN DIVORCE

WISCONSIN DIVORCE LAW: FINANCIAL DISCLOSURE IN DIVORCE

Stephanie Thompson, Estate Planning Attorney of Krueger Hernandez & Thompson SC · Nov 10, 2011 ·

Two questions that I am frequently asked by my divorce clients are “Do I have to disclose all my assets?” and “How do I know that my spouse has disclosed everything?” The answer to both questions is found in the Wisconsin statutes, which requires that at least twice during any divorce case, both spouses must file financial disclosure statements. These statements are in many ways the most important documents in the case. Each spouse must list all of his/her income, investments, accounts, vehicles, real estate, stocks, retirement assets, and debts, along with a monthly budget. The first exchange usually occurs early in the divorce case, and becomes the template for all case analysis, settlement discussions, and trial, if necessary. The second exchange is required for the final divorce hearing. Whether the divorce is by settlement or trial, the second disclosure is important so that each spouse has full knowledge of the other’s financial circumstances before the judgment is granted.

All assets with a value greater than $500 must be disclosed, and the document is signed under oath and notarized. This is done to ensure that the spouses take their disclosure obligations seriously. I have been involved in several situations in which one spouse has failed to disclose assets. Although it may seem clever, it is never a good idea. In most marriages, the spouses have a fairly good idea of each other’s income, and the marital finances. If a significant asset or income item is missing from the disclosure, the other spouse will usually notice immediately. This behavior “poisons the well” in the case, and leads to greater distrust and suspicion. The result—higher attorneys fees, for both sides. So not only is the failure to disclose a violation of the law, it is simply bad strategy.

Nevertheless, I run into cases where a spouse tries to hide assets. In those cases, how do we locate hidden assets? Usually through the process of formal discovery. This involves serving a document entitled Interrogatory and Document Request on the other spouse. As the name implies, the document requires two responses. First, the spouse must respond, in writing, to questions posed in the document. Typical questions require the spouse to name all bank accounts, investments, debts, sources of income, etc.  The second part of the document requires the spouse to provide requested documents. Usually, the requests demand copies of current account statements, tax returns, W2 income statements, etc. The spouse must prepare the response and sign it under oath. Usually, the spouse will comply with the document and disclose assets. If not, the next step is to ask the judge to compel a response and impose sanctions on the non-cooperative spouse.

Nine times out of 10, this approach works. If a spouse still insists on hiding an asset, a deeper investigation is necessary. That may involve sending a subpoena to the spouse’s employer or bank, or reviewing bank and credit card statements to identify spending habits. For example, a spouse may claim $1,000 in monthly income, but if a review of bank statements shows $2,000 in monthly deposits, the spouse will have some explaining to do.

Most spouses disclose their finances fairly, and as a result, most cases are reasonably amicable. It is wise to simply follow the rules, make the necessary disclosures, and work out a fair solution. Very rarely has a spouse succeeded in concealing assets and getting away with it. Attempts to do so simply frustrate attorneys, and more importantly, the judges trying to resolve those problems.  If that situation arises, however, there are several tools to resolve it. I encourage anyone concerned about this issue in his/her divorce to contact me. I will work to efficiently resolve the problem and help with a fair outcome.

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Stephanie Thompson, Estate Planning Attorney of Krueger Hernandez & Thompson SC
Stephanie Thompson, Estate Planning Attorney of Krueger Hernandez & Thompson SC
As the owner of Krueger Hernandez & Thompson SC, it is Stephanie’s mission to address each client’s goals for their estate plan. By identifying their wishes and concerns she can educate, guide, and counsel on the different tools and options that will effectively and efficiently accomplish those goals.
Stephanie Thompson, Estate Planning Attorney of Krueger Hernandez & Thompson SC
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