Marital Balance Sheet What Is It and Why Is It Needed

     In most divorce cases, a marital balance sheet is the focal point and or summation of all community assets, liabilities and credits.  This compilation will also determine the equalization (buyout) that one spouse owes the other. 
     I was assisting an attorney with a settlement offer, which I basically prepared a rudimentary balance sheet on a piece of paper, I stated to the attorney that he should have had us prepare a marital balance sheet before the settlement.  He stated that it wasn't necessary, that it was easy dropping in numbers in the disso program.  However, when his client started to notice certain monies being withdrawn from the accounts by the other spouse that she wasn't aware of, and the attorney couldn't find current investment statements and other important documents, no accounting of the numerous credit card statements were done, it was clear to the attorney that he was way over his head and reluctantly admitted that we should have prepared a marital balance sheet.  Fortunately, in this case no harm was done.  We were able to obtain all of the records needed.  However, in other cases, this could be a real problem.
     The accountant should prepare a marital balance sheet as soon as possible in the case not only to identify what's on the table as far as assets and liabilities but also to trigger the identification of other financial issues such as withdrawals of cash by a spouse made on or near the date of separation, separate and community property issues related to stock options, pension plans, real estate and other investments, identification of separate debt incurred after the date of separation, identification of certain credits the spouse could claim and many other financial issues that the attorney may be aware of but would not be able to calculate and present on his/her own (I'm being nice). 
    If you wait too long in the case to prepare a marital balance sheet, or don't prepare one at all, you could run the risk of not identifying financial issues that may have a favorable material financial impact on the community with respect to the division of assets and liabilities, ultimately shorting yourself on your half of the available community assets.  Also, any delays could effect the ability to obtain vital financial records as you could run up against discovery deadlines or the accountant may not have enough time to analyze and calculate the numbers before the trial. Be smart, be prepared and get us in early in the game.

Dave