In my previous blog posting, I discussed the basics of the discovery process as well as the distinction between formal and informal discovery. Here we will roll up our sleeves and discuss the work that both parties must do during this phase and how legal costs can be contained if discovery is done right.
When is Discovery Necessary?
Discovery is usually necessary for both parties to develop a baseline set of facts regarding assets and debt. This includes creating an inventory of personal property in dispute and determining debt amounts or values of financial accounts normally at issue in a divorce case: retirement accounts, investment accounts, and/or life insurance policies. It is also important to determine the value of any real estate, businesses, or significant personal property. In most cases, this happens through an informal exchange of financial documents with associated budgets and balance sheets. When there is disagreement as to the validity of these documents or the specific value of some property, Interrogatories and Requests for Production of Documents are utilized to ascertain what marital property is at issue and to provide documentation for each asset or debt.
Before Discovery: Creating a Budget and a Balance Sheet
The most efficient way to create the baseline set of facts in anticipation of discovery or litigation is to create both a budget and a balance sheet. Ideally, every line item on a budget will have a corresponding statement, bill, bank transfer/withdrawal, or invoice that shows proof of payment. The best way to assist your attorney is to create a working budget for yourself and provide all of the supporting documentation for each line item. If you’ve never created a budget before, even listing out monthly bills and providing years’ worth of bank statements to your attorney can help reduce future discovery/litigation preparation costs.
A balance sheet should be approached the same way as a budget. Provide your attorney with a list of all of your financial accounts (including account numbers) and their corresponding statements that show the value of those accounts. Providing tax returns that detail employment and/or investment income is also an easy way to give your attorney insight into the financial aspects of your marriage.
Preparation = Savings
The best way to save on your lawyer’s fees is to provide your financial documents in an organized way. If your attorney requests certain documents, be prepared to locate those documents, organize those documents and send those documents to your lawyer. At the start of your dissolution, it may be necessary to invest in the technology that will allow you to scan and send .pdf documents to your attorney. This avoids costly trips to Kinkos and the Post Office. If your attorney is able to produce a supported budget and balance sheet to opposing counsel and everyone has an agreed upon baseline set of facts to negotiate from, settlement is much more likely to occur before formal discovery even has to happen. The more quickly parties are able to agree, the cheaper your divorce will be.