What is "financial disclosure?"
A Financial Disclosure Statement is a document in which the party completing it should report all of his or her income, assets, debts, and expenses.
What is required in a financial disclosure?
You should include *all* of your financial information in your financial schedule. HelloPrenup offers categories to help you organize this information. Yes, everything. From fine jewelry to antiques, watches, even that Picasso painting hanging in your living room (just kidding, unless you actually have a Picasso painting!)
Some states require “full disclosure” of finances, and others require “full and fair financial disclosure” of finances. Other states allow parties to waive their rights to disclosure of assets. Now, this gets dicey, because if you choose not to disclose all assets, there could be a very clear argument that the prenup should not be upheld since the waiver was not done correctly, or the other party did not have reason to know of the assets, etc. The list goes on.
The bottom line? If you want the greatest chance of enforcement, it is important that you disclose ALL of your assets and finances.
So, where do you put this information?
Each fiancé will have a “Schedule A” or “Schedule B” financial schedule, that will include this information.
The long and short of it is that full financial disclosure is imperative for a variety of reasons, and if you fail to disclose all of your assets, your prenup may be found invalid in the case of a divorce.
Document Exchange
The exchange of documents to back up your financial schedule is always a good idea, but this exchange is not strictly required. There is no doubt that complete disclosure of all assets, income and debts on your financial schedule is essential. In addition to that disclosure, it is a good idea to exchange statements or appraisals associated with the disclosures on each of your financial schedules. Doing so can help show that each party understands and agrees that the values on their financial statements are accurate and not in dispute. It is up to you and your fiancé as to whether you would like to attach these statements to the back of your respective financial schedules, and doing so can add an extra layer of validation, and if your prenup is in dispute in the future, having those statements attached can help.
Here are some examples of what documentation you could exchange:
Income:
Personal tax returns for the years included on your financial schedule
Most recent pay stub
Assets & Accounts:
A copy of the most recent statements related to your assets and accounts (including but not limited to):
A copy of each party’s recent credit report
A copy of all most recent bank account statement(s)
A copy of all most recent investment account statement(s)
Most recent retirement plan statement(s)
Business-related documentation, including an estimated value
Business tax return(s)
Titles and deeds to all real property
Copies of insurance policies
Most recent appraisals and tax bills for real estate
Copies of all vehicle titles and registrations
Kelly Blue Book value of each vehicle
Appraisals of valuable personal property, such as jewelry, antiques, and collectibles.
Liabilities:
A copy of the most recent statements related to your debts and liabilities (including but not limited to):
Most recent mortgage statement(s)
Most recent car loan statement(s)
Most recent credit card statement(s)
Most recent medical debt bill(s)
Most recent tax debt bill(s)
Waiver of Further Disclosure
Regardless of whether or not you choose to exchange backup documentation, your HelloPrenup agreement will also contain a “Waiver of Further Disclosure” page. This page will contain signatures from both of you and states that you are each satisfied with the backup documentation (or lack thereof).
For more information on financial disclosures, check out our blog!
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