If you are getting a divorce, you and your spouse are obligated to provide each other with all relevant financial information. However, you may have sensitive information, such as business records, that you don’t want to share with your spouse because it relates to third parties. Under New York law, you may be able to restrict access to those documents using a protective order.
What Financial Records Are You Required to Give Your Spouse in Divorce?
Both you and your spouse must share financial records related to the marriage including all financial accounts, mortgage and loan documents, credit card statements, employment and business records and other relevant documents.
Can You Refuse to Provide Financial Records to Your Spouse?
If you don’t give your spouse the records you are required to provide, your spouse can subpoena the documents. In that case, you have two options: file a motion to quash the subpoena or seek a protective order.
As discussed in a previous post How Can You Challenge a Subpoena for Financial Records?, it is difficult to quash a subpoena because New York has liberal discovery rules that allow disclosure of information that is relevant or could lead to relevant information.
A protective order is an option if you can show that the financial records contain information that is significant but not relevant to the divorce. For example, if you are an accountant, your business records will contain information about your clients such as Social Security numbers, dates of birth and address that should be kept confidential. With that said, the amount of revenue you generate from clients should be disclosed because it is needed to value the business for purpose of dividing marital assets. Consequently, the protective order would allow you to restrict access to your clients’ personal and confidential data while permitting access to the relevant financial information needed to value the business or professional practice that was developed during the marriage.
How Does the Protective Order Limit Access to Records?
The protective order will state what measures will be taken to secure confidential information. If the parties cannot agree, the court will decide the measures. The most common ones include:
- Using a confidentiality agreement. The parties, their attorneys and any experts who will see the records would sign an agreement that they will keep the information confidential.
- Redacting the documents as needed. The party with the records typically offers to redact (or blackout) the confidential information before providing it to the other side. However, the other side may have concerns about this because they cannot judge whether the redaction was done appropriately.
- Hire an outside expert. A neutral third party can be brought in to review the documents and report on any relevant information contained therein. The opposing party would not see the actual records.
As discussed in a future post, it is usually best to negotiate disputes over discovery rather than taking them to the judge to decide. However, it is essential to have an experienced divorce lawyer who can negotiate effectively as well as strongly advocate on your behalf in court when needed.
If you are considering divorce, contact us for a consultation to learn how we can assist you in effectively resolving your divorce.