WHY KEEP OLD BANK STATEMENTS?
If you are reading this, chances are you're either thinking of or have filed for divorce. While I do hope you find this informative, I have to tell you that each case in unique. I am not giving anyone legal advice here, just some basic things I have seen come up from time to time during divorces. I am not going to quote case law or cite any legal source, another reason you must not rely on what follows to decide whether to take a certain action or not. Always get the advice of a competent attorney you trust.
Okay. So why keep old bank statements? Often times in a divorce the question of what was the marital standard of living comes up. How do you show that while you may have vacationed and otherwise spent like you had a high income, the brutal reality was you were leveraging, enhancing, supplementing (you can call it whatever you like, but let's agree it was dumb) your bank account by using credit cards, taking cash advances, and generally living in that easy-money rip-off hell of credit cards and reckless borrowing.
Old bank statements, credit card bills, etc. may assist you and your lawyer in showing the court just how over the top you (and your spouse's) activities were. Went to Bali for a week? Great. Except that was the time I was out of work and my plastic Satan had this incredible deal on miles for flights and I just knew my next book would sell/big commission check was coming/#fillinthefantasty. You may find yourself in the unenviable and humbling position of explaining how you lived the life of a Rockefeller when all you had were the clothes you're wearing and cars and motorcycles and jewelry and four timeshares and other crap you didn't need and couldn't afford, all at 17% APR. (See Tyler Durden) Actually, I take back the motorcycle. I used to ride prior to meeting a tiny, adorably insistent woman who didn't enjoy them.
There's a quote from a Dicken's novel that says in essence, if you earn $100,000 a year and you spend $99,999.99, you'll be happy and content but if you spend anything more than $100,000 ruin and misery will follow. (That's not an exact quote) That's an amazingly simple and true statement and it's filed in my brain with all the other great stuff parents, teachers and friends have given me over the years I aspire to follow but mostly don't .
Let's look at it this way: At trial your soon-to-be ex claims your marital standard of living was very high and the trips, gifts, fur coats and watercraft represented the life you enjoyed. Lots of the things we think we need to make us happy (remember that first little apartment and playing dominoes with friends over a bottle of wine that cost less than $15? I suggest it wasn't the things but the people you love and who love you that counts, but that's another story). The pumped-up "standard" gets you a ten-year support award that is just $200 more per month than it should have been. In ten years that's $24,000 in real money. Note I made the math easy; that's for my benefit. True story: The day I graduated college, my Dad asked me what degree I'd received. I said "English." He looked at me with a confused face and said, "But you've been speaking English your whole life." Dad was the smartest man I ever met, but he would've preferred to hear "Engineering" or "Chemistry."
Another issue that can arise is "co-mingling" your separate money with the community. Did you put a deposit on the marital residence or other property that came from a non-community source? Prove it. Did you pay some/all/any of the taxes for the other party's separate property? Prove it. This is called "tracing" and, along with what is community property and what is separate property are very tricky to determine. I always remember the case of the pink car that had wife's name stenciled in a beautiful script on the door. One side would argue, hey this is separate property; it's unique to and for the use of the wife, like her wedding ring. The fact that the car was a sales bonus wife earned while married is an argument for it being community property. Having tax returns, receipts, bank statements, testimony, etc. would be helpful in sorting that out. So would the advice of an experienced attorney.
I'm not saying you have to be some sad pack-rat and make every purchase or decision with an eye toward divorce. I'm actually quite a romantic young man, I just chose a career that's short on it. But having access to some of the things above might prove useful to your attorney. Oh, yeah. An attorney. As I've said many times before, if you're not willing to invest (and it's either investment or insurance, but it has value) in professional advice that is not at least equal to what you'd pay for a DJ, food, booze, etc. for a wedding, then what are you doing? Is the price of a used transmission too much to get some competent advice in this Sargasso Sea of divorce? In the end it's your kids, money and peace of mind. And future obligations.
Keep your head up and defend yourself at all times. Seek counsel trained in the law of divorce and who's easy to talk to. Yes, I know that is a preposition.
I am as always,
Robert Brownlee, Attorney at Law
"Hodi mihi, cras tibi." Today it's me, tomorrow it's you.