It would be sensible to say that a good financial settlement requires the full disclosure of assets by all parties. Whether for a prenuptial or postnuptial agreement, a separation, divorce, or any other financial agreement, how can people have a productive conversation if they don’t have all the facts in front of them?
Full disclosure is also the “right thing to do.” It represents a desire from all parties to be fair.
Many mediators require that clients prepare a signed and notarized affidavit of financial disclosure, or clients may do this voluntarily. This document would then be attached to the divorce agreement. If one party discovers later that full disclosure was not properly made, that party could start a legal action to try and renegotiate their agreement.
Of course such an action, as with most legal actions, would be:
- painful for all;
- a waste of assets otherwise available for the family;
- potentially lengthy;
- NOT a guarantee of the wanted results.
So, when you come to mediation to work out a settlement, please disclose!
Some people may not want to disclose and hold on to money as a way to get back at or punish the other party. At the end of the day, however, the one who does not disclose may feel guilty knowing that he/she withheld information and made an agreement that was not truly fair.
Holding on to your anger often causes more pain to you than to the one you are angry with.
If you have “valid” reasons not to disclose because of fear that the receiving party may not properly use or manage the assets, talk about it openly and figure out together a solution that is acceptable to all.
When you really set your mind to find a solution, you do.
Once you have disclosed your assets and have put a dollar value on them, you will be able to start a conversation on how to share them. You may be surprised. Sometimes the dollar value is not the only thing one party takes into account. Some assets may have sentimental value, and one may be willing to take less dollar-wise in order to have those things that have special meaning to them.
One party may opt to waive rights to a portion of assets he/she could be entitled to. It is essential that you know the value of what you are waiving rights to. I have seen spouses who waive rights to each other’s retirement accounts. They certainly can do that, but one may have a larger retirement account than the other. In the heat of the moment and the desire to move on, you may waive rights to an asset, only to later realize that it really had a higher monetary value than you thought.
It is important to know the value of what you are waiving rights to before you sign off.
When you come to the mediation table to work out an agreement, make sure you disclose all that you have so you can work together towards an agreement that is fair to all.
Would you like to share an experience concerning disclosure that could benefit others? Please feel free to do so in the comment box below.
Comments from Social Media
This is so true, mediating an agreement without solid knowledge of all the financial variables involved and how they will effect you is really going at it blind. Clients need to be encouraged to seek help with their financial situation even before coming to the mediation table that way, the mediator, I believe is better able to assist and help them come to well informed decisions. Having a neutral third party look at the financial statements with the clients together can help to identify non-disclosure issues and if such a situation is apparent help the parties through it. Non-disclosure should never be an option!
JoAnne Fiore (via LinkedIn)
jennifer safian. divorce and family mediator divorce and family mediation upper east side of manhattan (nyc) new york, ny (212) 472-8626 firstname.lastname@example.org connect on