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Money In / Money Out - Financial Affidavits Clarified

The purpose of a Financial Affidavit is to get a realistic snapshot of your current financial situation and a good way to get "all the cards on the table".

There are
Financial Affidavit templates on the court
website but my lawyer wants me to use his personal format. What do I
do?

The website supported Affidavits are court approved so
they are adequate as far as your requirements for the court are concerned.
However, there are a lot of reasons to use a more expansive Affidavit . A
complicated financial picture is better presented on a more detailed Financial
Affidavit, the more information available the better . It is really
valuable (but not
mandatory) to use the same format as your spouse so that you can easily compare
apples to apples. And filling out a Financial Affidavit can be a very valuable
learning tool.  Many people, believe it or not, have no clear cut idea of what
they spend or where their money is invested. The Financial Affidavit helps to
visualize "where" you, and your spouse, truly are financially.


Tips & Tactics:


It truly is possible for you to fill out whichever form you choose to use. 
In fact, if you are looking to save money on attorney fees, this is the place to
do it. After all you are the person providing the information to plug into the
Financial Affidavit form and attorneys can literally spend hours filling
in your Financial Affidavit.


1. Don't let this task overwhelm you. Take a few items a day and fill them
in.  This seems ridiculous, but when you are in the midst of a gut-wrenching
divorce, figuring out just how much you spend a month on car tolls or exactly
how much is in your IRA can be overwhelming.

2. Look at this as a fact-finding mission rather than an invasion of
privacy (yes, the court will be seeing that you spend $300 a month on
massages/pedicures, but they really don't care).

3. Don't go overboard with details in the expense section, but do in the
asset section.  If you leave out the dog walker expense, that's ok.  If you
estimate or even forget to put in the $4,200 old 401(k) -- this will be a
problem.

4. Remember, your Financial Affidavit is for your information;
only include your sole and joint accounts.  Expenses should include whatever it
costs to live your life, whether or not you actually pay the mortgage or phone
bill, etc.  If you receive temporary support, that is income; if you pay it,
that's an expense.   If you share the children expenses, state the full amount
and then show your 50% of those expenses.


5. Unless you are a bazillionaire, you don't need to hire
a financial planner to fill this out (or unless you have a particular phobia
about money issues and you just would rather pay someone else to figure out this portion of your life). In fact, if you are looking to save money on attorney
fees, this is the place to do it . After all you are the person providing the
information to plug into the Financial Affidavit form. And attorneys can
literally spend hours filling in your Financial Affidavit.


6. Try to come up with an agreement on what the house is worth and both use
the same figure; the mortgage balance is a finite amount and will be used to
come up with the equity amount you have in the house. If you have a disagreement about the value of the house, you will need an appraisal done; sometimes an unnecessary expense, sometimes a valuable tool.  

7. Remember, joint assets are considered 50 - 50% only for the purpose of
the Financial Affidavit. It is not the percentage that you will necessarily
settle upon.  For example, the listings will look like this:

*Joint checking account:  $6,000      Plaintiff's 50% interest: 
$3,000. 
*House:   $720,000  -$600,000 mortgage  = $120,000
equity    Plaintiff's 50% interest:  $60,000

It may end up (in the distribution of assets that you agree upon) that you
keep the entire checking account or that your spouse gets a bigger portion of
the house, etc.  The 50-50 proportion is just for assumption purposes, again for
the judge to compare apples to apples; it is NOT a settlement statement.

8.  Accounts for children in your name (UTMAs, college funds, UGTMAs)
are listed on the custodian's (your) Financial Affidavit but are not added into
the Asset total.

9. Since it is an affidavit, it must be sworn to.  Your attorney (as a
commissioner of the court) can notarize your signature; or if pro se, go to your
bank officer, friendly paralegal, etc.

10. You will also see your spouse's Financial Affidavit .  Again, if you are
looking to cut expenses, make clear to your attorney that you will be the one to
review your spouse's Financial Affidavit and that you don't need your attorney
to review the other side's document for hours and then decipher it for you. If
you are uncomfortable with facts and figures use a financial professional or
accountant to review your spouse's Financial Affidavit. They are less expensive
and more educated on facts and figures than a divorce lawyer.

FYI- If, for example, you both turn in Financial Affidavits that
show one party with assets of $2.5 million while the other only has $150,000 and
your Separation Agreement does not call for any "even-ing out" of these assets,
a judge (at your uncontested hearing aka divorce hearing) can question the
fairness of the settlement and will often take testimony from the  parties to
make sure of each party's due diligence.  If the judge is not "satisfied",
he/she can actually refuse to divorce you.  After all, divorcing in an
equitable distribution state --  means the division of assets &
liabilities should be fair not equal.  If the court doesn't
consider the settlement fair based upon the Financial Affidavits, then
the judge can exercise his/her authority and make you go back and
renegotiate. 

That being said, Financial Affidavits can also be just given a cursory
glance. So you will see, that all that time spent worrying about whether you
portrayed to the penny how you've spent your money or that the judge will
question how much you spend on your child's Math Tutor, is really in
vain.



This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Mo Harde May 30, 2013 at 02:09 PM
Here's the rub though...if your spouse has messed with the marital assets, income stream, has hidden money or dissipated money, falsified IRS returns, then category numbers on a page(s) are about as useful and easily manipulated or falsified as toilet paper. INSIST THAT EVERY SINGLE NUMBER BE BACKED UP BY BANK STATEMENTS, RETIREMENT STATEMENTS, MORTGAGE DOCS, CANCELLED CHECKS (both sides), WIRE TRANSFERS, W-2's, RETURNS, etc etc. More women have gotten scammed in the high net worth Fairfield County courts than just about anywhere in the financial world / hedge fund US suburbs.
Divorce Information NOW June 03, 2013 at 05:23 PM
YES...supporting documentation is essential.

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