November 10, 2009
By: Barry Armata
What You Should Know About Your Family's Finances
How well do you know and trust your spouse financially? As divorce lawyers, we often talk to spouses who have limited knowledge of their spouse's finances, or the state of their family's financial affairs. In a typical marriage, one party generally pays the bills and does the banking – they are the one who has some idea of where the couple stands financially. But, that same spouse may be in the dark regarding other parts of their family's financial picture. There are key questions you should know the answers to insure you understand your family's financial security.
- Do you know how much your spouse gets paid? How is their income paid and how is it structured? Does it include bonuses, stock options, or reimbursements for certain expenses that normally would be paid by the family, such as car allowances, club memberships and the like? Is it a guaranteed income or is it commissioned-based? Is a component of it cash paid under the table, and if so how much?
- What is your family's debt, both long term, such as mortgages, and short term such as car leases, credit cards and other loans? Do you know the repayment plan- minimum amounts? Do you know when will the debt be paid off and what the interest rate is? Does the debt have be repaid to a creditor like a bank, or was it a loan from another family member?
- Has you spouse made any large purchase in the past few months? Are there any purchases over $100 that you cannot account for? Were the purchase necessary and affordable, or were they extravagant and did they put the family under additional financial pressure?
- Do you know where your family's income is going? When money is deposited, where is it deposited and what is used to pay? If you have excess income, how is it being invested? If you have a short fall in income, how is it being made up? Who has control of the paying the bills and when are they paid? Are they being partially paid or fully paid? Are they being paid in a timely manner?
- What are your family's assets: home equity, retirement accounts, back accounts, stocks, collection or other personal property of significant value? How are the assets titled and where are they held?
- How is your family poised for retirement? Are there pension that will pay out a monthly sum at a certain age? Are there 401ks, IRAs, Roth IRAs, 403b plans or other qualified retirement vehicles? What are the values? Who is holding and managing those funds?
- What does the family maintain for life insurance policies either by paying for them directly or through an employment contract? What is the death benefit? Who are the beneficiaries? Do the policies have any cash value and are they current, in other words paid up to date? Would these policies be sufficient to maintain the family in the event of a tragedy or an emergency?
While discussing these topics may be uncomfortable in the moment, it is better to have knowledge of your family's finances rather than being left in the dark. In divorce, when the marriage has soured and communication has all but stopped, it becomes even more difficult to gather this information. While Connecticut law requires a complete and accurate disclosure of a party's finances, complete with a requirement of a sworn financial affidavit with the court, it is much better for a spouse to be prepared by having a fundamental understanding of their family's financial structure.
If having a frank an open discussion with your spouse about these questions is difficult, you may want to undertake your own investigation by reviewing bank statements, tax returns, and pay stubs to gather as much information as you can. You may want to utilize the services of an outside professional such a as a marital therapist or marital mediator to communicate to your spouse about these matters. If your spouse is evasive or secretive about these questions, this may suggest either skeletons in the closet for which you could be liable, or a difficult road ahead if divorce is in the cards.
At Brown Paindiris & Scott we pride ourselves in educating our clients as to their options regarding their financial affairs. If you are uncomfortable raising these question with your spouse, talk to us about how to obtain this information and secure your financial future.
The Family Law Department at Brown Paindiris & Scott is made up of experienced and competent Connecticut family law attorneys. Brown Paindiris & Scott provides services in simple and complex divorce and family matters in Connecticut's family division and probate courts. We have experience with complex financial issues, division of assets including retirement assets, real estate, tax-related issues and with difficult custody and parenting issues. We also have experience with the special issues facing same-sex couples.
With over 60 years of combined experience, the firm's attorneys practicing divorce and family law have the ability to handle difficult issues and to craft creative solutions to meet the needs of our clients. Our attorneys and staff work as a team to devote the time and individual attention to each matter that it deserves because no two cases are exactly alike. Brown Paindiris & Scott maintains law offices in Hartford, Glastonbury, East Hampton, and Bristol, and our attorneys would be happy to meet with you at any of these convenient locations.