Colorado divorce cases require both parties to the case to honestly and fully disclose all information that is relevant to the resolution of their case. A party must make these disclosures without waiting to be asked by the other party, as it is their responsibility to make sure all material facts are brought up. When it comes to what is deemed “material” to a divorce case, there is little judicial guidance. Thus, it may be best to err on the side of caution and include all relevant information to prevent potential future issues from arising as the consequences of not providing material information can cause serious repercussions such as contempt, sanctions, and even a reopening of the case.
Mandatory Financial Disclosures
A petition served in a Colorado divorce case sets off certain mandatory disclosure requirements that must be met by both parties. These are outlined in Form 35.1 of the Appendix to the Colorado Rules of Civil Procedure and must be provided within 42 days. These required financial disclosures include but are not limited to:
- Each party must provide documentation relating to their income, including income from employment, investments, government programs, gifts, trust distributions, prizes, and other sources. This requirement applies to all income (not just taxable federal income). For each source of income in the current and prior calendar year, each litigant must provide pay stubs, a current income statement, and a final statement for the previous year. Self-employed individuals must also submit a sworn statement showing gross income, business expenses necessary to produce said income, and net profit for the three months prior to filing the petition or post-decree motion.
- Both parties must provide personal and business federal income tax returns for the three years prior to filing, as well as all necessary documents needed to complete those returns, such as W2s, 1099s, K1s, extension requests, and estimated tax payments. Additionally, this disclosure requirement extends to any business returns for any businesses that a party has an interest in that entitles them to a copy of that return.
- Both parties must provide copies of all personal financial statements, liabilities, and credit or loan applications prepared in the past three years. It is generally not necessary to prepare new documents in this category if there are none already available for disclosure.
- Both parties must produce the last three fiscal years’ financial statements, all year-to-date financial statements, and the same periodic financial statements for the prior year for every business they have access to. This requirement is not limited to businesses in which a party is a sole or majority owner.
- Each party must provide title documents and evidence of value for all real estate in which they have a personal or business interest. Evidence might include deeds, appraisals, or similar documents.
- Each party must provide all documents related to their personal debts, as well as the most recent debt statements demonstrating the balance owed and payment terms. This applies to mortgages, lines of credit or equity loans, car loans, credit cards, and similar debt instruments.
- Each party must supply the most recent document stating the value of their investments. Typically, this information is found on a brokerage statement. For shares held directly by a client and not through a brokerage house, copies of the shares may be required along with any available information on the current trading price.
- Each party must provide information about their employment benefits, including the most recent documents stating the current value of each benefit.
- Each party must provide the most recent document identifying their retirement plans and stating the current value, as well as a summary plan description.
- Each party must provide the most recent statements (usually the past three months) identifying their bank or financial institution accounts and stating the current value.
- If childcare expenses are incurred, each party must provide documents showing the average monthly employment-related childcare expense.
- If any extraordinary expenses are incurred on behalf of a child in the family, the parties must provide documents showing the average monthly cost for all recurring extraordinary children’s expenses. This could include ongoing treatments such as counseling, physical or speech therapy, competitive sports, orthodontia, or other similar treatments. This disclosure requirement does not extend to incidental or one-off costs like routine immunizations or occasional illnesses.
In addition to the mandatory disclosures, litigants may be required to answer interrogatories. These are written questions that must be answered under oath and in writing by the opposing party. Interrogatories are one of the most fundamental and widely used forms of discovery. A party can serve on each adverse party any of the approved Supreme Court pattern interrogatories. Additionally, up to ten additional written interrogatories can be served on each adverse party, with each interrogatory consisting of a single question.
Requests for Production of Documents
Requests for production are frequently filed alongside interrogatories. A party can serve on each adverse party any of the approved Supreme Court pattern requests for production of documents. Additionally, up to ten additional requests for production of documents can be served on each adverse party. When producing documents for inspection, they must be provided in the form they are usually kept in the normal course of business or neatly organized and labeled to correspond with the categories in the request.
If you are looking for a reliable and experienced divorce attorney, contact Burnham Law today. Our experienced attorneys understand the rules and strategy behind financial disclosures and discovery such that even before walking into trial, you can have the upper hand.