Podcast: I Do Until I Don’t – Episode 8

In this episode of I Do Until I Don’t, attorneys Joshua Stern and Marvin Mendez take on the discovery process—what it is, why it matters, and what it actually looks like from the moment a case begins.

Josh and Marvin walk through the practical steps of gathering financial documents, completing a financial affidavit, and understanding the difference between a quick, cooperative exchange and a contested, document-intensive process. They discuss the risks of opting out of discovery, the role of financial affidavits in establishing credibility, and the protective clauses every settlement agreement should include when full disclosure is uncertain.

Whether you are at the very beginning of a divorce case or trying to understand what your attorney is asking for and why, this episode offers a clear and candid explanation of one of the most important, and most frequently misunderstood parts of the process.

Key Moments:

00:30 — What is discovery?
02:57 — The necessity of paper trails
07:23 — Financial affidavits
13:51 — The cost-benefit deterrent
16:46 — Finding issues after the case has been closed

Transcript:

Josh: Even if 99% of people don’t hide anything, 100% of people will tell you they’re being forthcoming. I have never once had someone produce documents to me and say, “Oh, and by the way, we’re hiding something.” [laughter] The only time I’ve found something that was hidden is when we pressed on the production.

[Music]

Marvin: All right, man. Welcome back to another version of I Do Until I Don’t. Marvin Mendez, Stern Mendez.

Josh: Joshua Stern, also Stern Mendez. Go figure. [laughter]

Marvin: All right, Josh. We’ve been talking in our last few episodes about the process of what happens when you get served with divorce papers, the process of interviewing attorneys, what happens before you determine the attorney you want to use. And I think it’s led us to different stepping stones along the procedural process, which a lot of people who don’t go through their perpetual divorce cases or on repeat mode generally don’t understand the process. And so there’s a lot of nervousness or unknowns [yes], right? And so I think the last conversation we had is we talked about, okay you get served with the papers do you move out of the house or you don’t move out, okay, and that was a very detailed and helpful conversation, but let’s say we’ve gone through that. We resolve the issue of what happens with you stay or you don’t stay the next steps that we’re talking about is leading to discovery [yes] now discovery seems like a very reasonable ordinary word for you and I but for those who don’t understand and don’t do this for a living, why don’t you just give them a little background as to what that entails.

Josh: So, we have a problem here. We have the start of a case, any kind of litigation, really and not everyone has access to the same information. I mean, there’s a lot of ways this comes about, and it’s not always, or typically not, nefarious. Often within a family, there might be sort of a default assignment of roles. Someone might be more in charge of, let’s say handling bills or other financial matters. They might have more knowledge or access to, in this case, statements, accounts, and so forth. So what we do in the discovery process is we’re looking to exchange, and really on my end, acquire relevant information, relevant documents and information that will help us figure out: hey like what’s in the estate, what do we own, what are things that we need to resolve and help us fill in the blanks whether it’s a balance sheet or other questions we have. So, it’s a really expansive topic that’s designed to put everyone, to the extent possible, on equal footing in litigation. No litigation, no trial, by surprise. So that’s like on a very broad level, which I’m sure is probably intimidating, right? You’re sitting here watching this. Oh my god, I have to give my spouse everything they could think about. Like, it’s going to take forever. Fortunately, that’s not really how it works or how the process goes. So, let’s… you want to do a hypothetical? Where I come to you, and I say, “I just got served. I’m freaking out”. Let’s say I’m the primary breadwinner and I’m thinking, “Okay, I just got served. I don’t know what’s happening.” You know, should I get my documents together? Like, how many tax returns do you need? Do you need 50 tax returns? Tell me what to do.

Marvin: So, the way I generally start off with is helping you understand that, as much as this is going to be a tedious process, it’s a necessary process. But similarly, it’s also necessary if the parties make it necessary, and we’ll get into those particulars later on in this podcast. But when they come to me, and they start trying to figure out what the steps are going to be, I try to focus on telling them, look the purpose of discovery is to really understand the depth and breadth of the marital state. What’s the current snapshot of it? What assets exist? What liabilities exist? What debts exist? What your income and expenses may be, so that both parties can have some transparency. As you said, one person maybe managed all the finances historically, and the other person just relied on the other person, hoping that there was good intent behind their actions. But when it comes to divorce time, there’s always one person, not always, I guess that’s too broad, but often times there’s one person that has more knowledge of the financial expenses. So, I think as the person who generally runs it, I would put that responsibility on them. I would say, look, the easiest path to a resolution here to an amicable divorce proceedings, as ironic as that sounds, is to be fully transparent. So, from the onset, I invite them to say let’s gather your tax returns for the last three years. You know, usually the window is 3 to 5 years, but just to get a quick snapshot is give me your bank statements for the last 3 to 5 years to understand your income, assets, and maybe sometimes accounts and information is disclosed in your tax returns. Give me your bank statements most recent one for every single account. Give me your credit card statements for every recent account. And to the extent that anything is potentially considered non-marital, or they’re claimed for non-marital, I’ll start asking information of “show me the balance of these accounts that existed on marriage state minus one”, right? Show me that there hasn’t been a transfer of accounts or a change in the name of the accounts to try to really trace that non-marital component, because, as you know, the person claiming the non-marital component has the burden of proof to show that this is non-marital, that there was no transmutation, and that there wasn’t a gift to the marital state. So, that would be the first step that I take, just your very basic high-level. And I think for me the primary approach to that is to really understand what exists, right, to get a big picture snapshot and say, look, if this is really what the marital state consists of, I kind of get a sense where this case is going to go and how it’s going to resolve–and the likelihood of a quick or not quick resolution. [Right] But, as you know, that’s not just the amount of information that we need, right, that’s not just the amount of information that certain people accept and why.

Josh: So, it’s really… I think of discovery, as I’m sure you do as well, as being based somewhat on the issue before us. So, I think the balance sheet is such a great example. If everyone comes to us and they say, “Look, this is uncontested. My husband, my wife, they have the statements, but you know, there’s no funny business. Let’s figure it out.” Amazing. We’re moving to a marital balance sheet. We’re using recent statements to figure out the correct values. You know, life’s good, and now we can start talking about the asset split and, kind of, the complexities of that. But that is sometimes the more expedient, best-case option. And so, there are times in which you have questions about asset tracing, you have questions about communications concerning various issues in the case, and discovery can be a little bit more broad. And so, when we think about, kind of, what discovery encompasses, I’m going to use a legal definition on a legal podcast, which is like shocking, right? I know. [Show off.] I know, right? [laughter] So, but we’re looking for evidence, or we’re looking to discover things which… things which might lead later to the discovery of evidence. So, it doesn’t have to be, you know, Marvin has an account at XYZ bank. I want to know all of the XYZ statements. It could be, Marvin has an account at XYZ Bank, and I think by learning about that account, I’ll also learn about ABC Bank. And so, you can have that discovery request be about a step or so removed from where you’re looking to go. It can be very expansive, and I want to go back to what I started with. It’s tailored to the problem. So, just because it can be expansive, and at times intrusive, let’s be frank about it, doesn’t mean it has to be, doesn’t mean it will be. It is very much specific to what we’re trying to resolve, and also how we’re trying to resolve it. But the short version is, if it pertains to issues in the case, odds are it’s discoverable.

Marvin: You know, it’s interesting, right? One of the constants that you raised in there, which is, okay, I’ll use this bank account and secure this information because that account may lead me to other information and other accounts. What happens if the person who provides the information says here I promise this is it, this is all the information that you do, right, I’ll sign an affidavit, I make a representation that this is all exists. Do you tell your client, “You know what, let’s accept it for what it is, move on, and we can wrap this case up quickly”? Or do you have any legal obligation or responsibility, and do they have the right to disregard your advice in regarding discovery and seeking more information, to ascertain the veracity of the documents provided or the completeness of the documents provided?

Josh: That’s a… that is a amazing question.

Marvin: It’s a lot. Sorry.

Josh: No, no, but I mean, think about it. So, the issue of accepting the final numbers is an issue of settlement. Clients have full settlement authority. So, if I go to them and I say, “Look, I think bank account XYZ has $10 in it.” And they say, “No.” and they have reasons for it, and we’ve got to keep digging, I think there… that’s a real conversation to be had and something to be considered. Now, whether we trust representation is kind of the inverse issue, and in that situation, it’s really up to the client. You have to advise them that unless you have official documentation, how do you know? I mean, how do I know what’s in someone’s account, unless, let’s say, Chase Bank tells me this is what’s in the Chase account? So short of that, the client’s taking a risk. It’s the client’s risk to take. You tell them what the pros and cons are and then kind of play it out. But I would be… I would be a little hesitant, absent supporting documentation, which will bring me now to I think a question we should touch on in the first place, which is “what is the role…”, well, I’ll ask you two questions, one a legal question, but one a practical one. [Okay.] Legally, what is the importance of a financial affidavit as it relates to our ability to kind of pursue discovery? But I think the more important question is, you know, how do you handle the financial affidavit, Marvin, in different situations? Let’s say ones where you think will be a simple uncontested case, and maybe ones where you expect the affidavit to be more scrutinized?

Marvin: So, from a legal aspect and for defining financial affidavit purposes, for those who don’t understand, it’s a document that outlines your income, expenses, assets, and liabilities. And, it’s a snapshot into it because you provide certain documents in support of that. But from… in approach of the details that I put into it, in approach of helping my clients navigate through this process, the most important thing that I have them disclose or put in there, that I tell them is this is not a wish list. You don’t put in these expenses what you wish your monthly grocery bills to be, what you wish your monthly personal expenses to be, but it’s a snapshot into the last 12 months, for example. So, try to average that out. We use these financial affidavits whether it’s for a summer hearing on child support and maintenance. But it’s not just to say, “look on a temporary basis while the divorce proceeding is happening, this is how much that I want, and this is what’s expected to cover these expenses.” I think what you need to do is look at that information for the long term because your client’s credibility can be used, right, against them if it’s not truthful, if it’s a wish list, if you inflated the numbers, if you forgot information, it’s not a big issue. If you inflated or created this wish list, then you can be questioned, and the court’s going to start questioning your credibility on that. And if you lied on this, then there’s a greater likelihood that you lie on something else going forward. So, you want to be cautious on how you approach that. So, I’m very cautious, with me and with our paralegals, [who] you know are tremendous help in this process, and with the other attorneys, to make sure that we analyze this from a cross-examination purpose, right? Where I question, and I stress test every single expense that’s associated, and that’s outlined for them. It’s necessary to get the discovery process should your client be interested in further going through that, or you advise them [of] the need to go through further discovery, so that you can better advise them [right] because you can only advise them [on] what you do know. Even if the information is accurate from the other side it’s better to go through all the additional information to say, yes it is right, than not go the information and find out later on that something was missing [100%] but on the details of the financial affidavit and the data that’s included in there, I really try my best to make sure that the information is accurate, not inflated, because they do want to make sure that the client’s credibility is not questioned at a later date. And if the numbers are not accurate, at least have there be an explanation as to why these numbers exist. Were they a one-off charge, and it was an analysis based on the last 12 months? That the cost of groceries, expenses, are they really what they are? How do you justify that? Whether it’s tariffs, inflation, or just increased cost of living. So it’s really important to go through the information and make sure that you’re honest and disclose all the information. And that’s how I use the financial affidavit to relay advances. But then, after we’ve completed the financial affidavit, we go through more in-depth discovery [Yes] where we start asking for more detailed information. And some may say, it’s like, why do I need to go through that? I am being honest. This is truthful. I have no reason to lie. This is the current value of the accounts. The reality is, you know the law provides for several things, right? Did you spend marital money for non-marital purposes? How do I go through that information? How will the other person have that right to make claims against that if they haven’t received all the information? Like you said earlier, maybe there’s times where an account discloses another account that was inadvertently, you know, omitted, like the one time that someone said, “Oh, I forgot about the $500,000.” Right? Where do I… I [don’t] know where I left it, I don’t know. But it’s necessary to go through the information. And this is where you can ask for information for 3 years to 5 years to really get more than just a snapshot of what the marital state consists of assets, and debts, and liabilities, but also to determine value of certain assets. Also, to be able to involve experts and have them interpret something for you that you may not know, or the other person didn’t know. While it may be easy for the person providing the document and has control of all the assets to explain it, the other person may not necessarily trust it [Of course], and that’s where they’re relying on you as an attorney to interpret the information for them, and do it so honestly. But, I’m just going to…Is a client obligated to go through discovery?

Josh: Sort of, right. So, your client is not obligated to issue discovery. There are compelling reasons to issue discovery in certain kinds of cases. I’m not, you know, that gets kind of a far field, but you can’t opt out of responding. So, the other side says, “Hey, you know, we want to see your bank statements.” And the client says, “Well, I didn’t ask for theirs. This is intrusive. Can’t we just move on?” The short answer is, kind of, no. This is a right you have as a litigant is to issue discovery to obtain relevant information to prepare your case. And your decision not to issue isn’t a bar on the other party. So, can you opt out? Kind of. Kind of, but not really. Ultimately, both people need to be aligned. Otherwise, you’re going to have disparate experiences during the case. You know…but…

Marvin: You know, I’ve been in a situation… Sorry to cut you off there… [Please], where on the heels of what you said just now, is one side is like, “Why are they asking for so many documents? I’m not asking for information from them.” And my advice is you’re entitled to ask for the information. You have the right to seek information. And they say, “Well, I’m comfortable with everything. [Sure] I’m comfortable. I don’t need anything.” And so, my response is an easy term, CYA, right? Yeah. Really explaining to them, “I cannot tell you whether the deal before you at the end is good or bad, great or worse. I cannot tell you if they made a full disclosure or not because you’re choosing not to pursue it.” Whether it’s because discovery can get expensive, whether it’s because the other person isn’t cooperating, or whether it’s because of some other delay in the process, or anxiety to get this matter move forward [Of course] quickly. And not anxiety, but a desire to get this matter moved forward quickly. And so, at the end of the day, they’ll disclose their entire information. The other side doesn’t do anything. We just include simple language that we were advised, you were advised that discovery is relevant, it’s necessary, I can’t give you the information. And then, you know, understand that this is everything that exists. But what happens if you discover something later on that, because you chose not to pursue discovery, because both parties chose to not pursue discovery. How do you remedy that?

Josh: Yeah, that gets very complicated very quickly. And so, without going too far afield, there’s a few different statutes you would look at depending on the duration of time post entry of judgment. They have different standards or burdens of proof. And then on top of that, in certain settled cases, you could have an undisclosed assets clause saying if you intentionally failed to disclose, undervalue, or manipulated an asset, you have to actually produce and deliver that asset to the other non-offending side. There’s complexity in this stuff. And I’d say the biggest complexity, we’re going to go full circle now, to discovery is you don’t have the information anymore. So, if you didn’t pursue the information in advance, the case ends. Now you no longer have discovery power. You don’t keep it for life. It’s specific to the case. How will you now get hidden documents to prove the assets were not disclosed? It’s usually better to do it in advance. And the thing I would add, and this is 100% the case, I have never once had someone produce documents to me and say, “Oh, and by the way, we’re hiding something.” The only time I found something that was hidden is when we pressed on the production, when we asked for more documents, when we raised questions. So, you know, even if 99% of people don’t hide anything, 100% of people will tell you they’re being forthcoming, and knowing that everyone’s going to say that means you can’t trust it lock-step, because one time out of a hundred at least, it won’t be right. So, you know that there’s some risk there, and the clients face that same risk. So, we all kind of have to assess the cost-benefit, everything that you just said, and figure out how to go.

Marvin: Yeah, the cost-benefit seems to be a significant deterrent for people to pursue discovery. And granted, it backfires or, you know, at the end they may regret it, but everyone’s in a rush to just get out, move on, next chapter of their lives. Everyone’s in a savings mode, right? Because no one wants to spend whatever money that they’re going to get out of the divorce case on legal fees. Because at the end of the day, if we do go through this process and even if the person was correct or if the person was lying, the attorneys are really the ones that end up, you know, going through a lot of this work, and that costs a lot of people money, and that’s money that can be better used. So, clients are stuck between a rock and a hard place, trying to balance out “How much do I really need to do? Am I okay with that? I just have…let’s just forgo it.” But I do agree with you that there is protective measures that can be taken by including language in a settlement agreement that covers you in the event something’s later disclosed that wasn’t part of this process. But at the same time, I truly believe I can only advise my client, right? You can lead a horse to water, right? But you can’t make a drink, right? So, I really believe in that philosophy, and I believe in that with my clients, where like, I will give you all the information that I can based on the information that I’ve gathered. I will give you the proper advice to tell you that this is proper and necessary, but I’m also not going to push you into something that you don’t want to do. Now, every attorney’s fear is always going to be a concern for malpractice if they didn’t do anything. [Right] I assure you from my perspective, I make sure that I leave a paper trail telling the client the importance of it. But again, at the end of the day, my obligation has been satisfied. It’s been respectful. It’s been professional, and parties make their decisions at the end of the day. [Yes] What I can do in this regard is make sure that I have the relevant language that, like you said, a non-disclosure clause, consequence clause, fees, and penalties associated for failure to disclose, so that there could potentially be some real bite later on if you do not get all the information that you needed.

Josh: 100%. And you know what the client should do? If you’re concerned, you got served, you’re the start of the case, just call us. We’ll help you.

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