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Law Office of Lily L. Huang

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Why reviewing your tax and financial records can help in divorce

When facing divorce, some people dig in their heels and want to fight, while other people give up and choose not to assert themselves at all. As with many things, an approach somewhere between those two extremes will be what tends to work.

While you don’t want to obstinately fight just for the sake of making things difficult for your ex, you also don’t want to make any decisions that could have a negative impact on your future financial solvency. You can choose to try to work with your ex while also remaining skeptical of their intentions and honesty, and advocating for yourself throughout the divorce process.

Especially when it comes to financial decisions, it’s important to have all the information possible before you agree to anything. Looking over recent financial documents and several years of tax returns can help you determine if you will go into the divorce on an even playing field.

Financial records give you an idea of what assets your family has

Particularly if your spouse is the one who handles family financial matters, like filing income taxes, you may not be very familiar with the details of your family’s financial circumstances. Not knowing what assets you and your spouse have acquired during your marriage will leave you at a disadvantage when it comes to requesting a fair and reasonable split of your assets.

It is common for spouses to provide an inventory of their assets as part of the divorce proceedings. Having financial records to compare with your spouse’s will make it easier for you to determine if there are omitted assets or possibly income that isn’t accounted for. These could be warning signs that your spouse has hidden assets.

How hidden assets impact the divorce

Whether you negotiate your own terms for an uncontested divorce filing or you ask the court to allocate your assets, accurate household information is critical to ensuring a fair outcome.

If neither you nor the courts are aware of a secret bank account, for example, you won’t know to ask for your share of those assets, nor will the courts know to consider their value when allocating other assets and debts from your marriage.