When filing for a divorce, each spouse must create a financial affidavit. This relatively simple document includes information on both spouses’ debts, assets, and income levels. It is designed to provide a baseline for decisions regarding child support, alimony, and asset division. The name of the document and the scope of the statement vary between jurisdictions. But every jurisdiction will require both spouses to provide some sort of documentation pertaining to their financial situation.
Ensuring A Complete And Accurate Filing
Drafting a financial affidavit requires care since incomplete or fraudulent documentation can distort subsequent proceedings. The affidavit should provide a complete listing of material assets. The list should include real estate, home contents, collections of goods, vehicles, tools, and any other tangible assets owned at the time the affidavit is signed. It should also include financial holdings like bank account balances, retirement plans, stocks, bonds, commodities and futures, and other financial instruments with any value.
Debts must be listed as well. The most common and largest debts include mortgages, vehicle loans, credit card debts, and student loans. However, the list should be all-inclusive. Financed recreational items, such as hot tubs, all-terrain vehicles, and home improvements should be listed, as should any payday loans or micro loans.
The most important thing to remember is to be complete. Affiants who fail to list all of their debts may be assigned spousal or child support payments they are unable to afford later.
Affiants must also describe their income accurately. Whether it should be listed as weekly, monthly, or annual income will depend on the jurisdiction.
It is important to realize that income is not limited to the earnings from a weekly or biweekly paycheck. It includes other sources of income, such as alimony from previous marriages, payments from retirement plans or social security, and structured settlements. Income from side jobs or gifts which otherwise may not be documented must also be included. Additionally, affiants may be required to disclose certain employment-related perks.
Expenses should also be categorized for the same period as income. Common expenses will include utilities, mortgage payments, food, medical care, and other basic costs of living. Any personal expenses for entertainment, recreation, and vacations should also be included in the filing.
For those who pay cash for a majority of their purchases, documenting expenses can be difficult. In such cases, the affiant must retrieve receipts to create an accurate depiction of his or her spending habits.
It is worth noting that just because something is listed on a form does not mean it is considered community property or will be subject to division. Anyone with questions about whether something must be included in their filing should ask his or her attorney. In general, it is better to include items that may seem trivial than it is to risk excluding income and assets. Their exclusion may prompt the presiding judge to believe the spouse is intentionally trying to mislead the court.
The Lifestyle Analysis
In addition to accurately depicting one’s financial situation, the financial affidavit should be honest. Some courts will require the divorcing spouses to undergo a lifestyle analysis after drafting financial affidavits. As the name suggests, a lifestyle analysis provides a comprehensive picture of one’s lifestyle during the marriage by analyzing all household expenses by both parties. It requires significant amounts of documentation, including credit card bills and bank statements.
The Importance Of Honesty
This lifestyle analysis is common since the original financial affidavit only includes information from one party. While the affiant swears under penalty of perjury that all information contained in the affidavit is true to the best of his or her knowledge, there is little else to stop the affiant from engaging in fraud. The temptation to provide false information or knowingly exclude material assets from the affidavit can be difficult to resist when one is facing losing over half of his or her net worth.
If dishonesty is uncovered, the affiant who perjured himself or herself will be penalized. At a minimum, the remaining proceedings will be colored by the fact that he or she lied to the judge who will be approving a settlement or rendering a decision.
Although the individual may be charged with perjury for lying to the court, criminal charges are relatively unlikely. That said, deceptive affiants are likely to be placed in a significantly worse financial position than they would have been had they provided the court with correct documentation.