The complete exposure of the private details of your married life to lawyers and judges who have considerable power over your future can be one of the most traumatic aspects of going through a divorce. It can make you feel vulnerable, anxious, resentful — even furious! However, where your finances are concerned, it is essential that you provide accurate, detailed information.
The Courts will likely require you and your spouse each to file an official record of your current financial situation, generally called a “Financial Affidavit.” This is to document in detail what you earn and what you spend (income and expenses), and what you own and what you owe (assets and liabilities).
Simple enough, right?
Well, unfortunately, it’s not. Although at first a Financial Affidavit may seem like a straightforward request for basic information, it’s actually very complicated to complete. You’ll need to do more than enter basic information from your checkbook registry and credit card statements. And as detailed as it is, the Financial Affidavit is absolutely critical to get right. The Courts use the information you provide to determine temporary alimony and child support, and of course, it will figure largely in the final divorce settlement itself.
Here are six ways to avoid major pitfalls in completing your Divorce Financial Affidavit
Understand The Requirements
Laws about many aspects of the divorce process vary from one state to another, and regulations concerning Financial Affidavits are no exception. Different states don’t even agree about what the document is called. Connecticut has a “Financial Affidavit,” but if you’re divorcing in Utah, you’ll be asked for a “Financial Declaration.” New Jersey couples are required to file a “Case Information Statement,” while the Courts in New York use a 14-page “Statement of Net Worth” form.
Get the correct forms in hand, and before you even pick up your proverbial pencil, review them end-to-end. You’ll want a complete understanding of what you’re being asked to provide before you dive in.
Pay Attention To Detail
Whatever they’re called where you live, Financial Affidavit forms all ask for very detailed information. For example, you’ll have to itemize your every expense according to category. That means everything from the obvious, such as mortgages, insurance, and car loans, to things that might not come to mind right away, such as tips, membership dues and pet grooming.
Anything you leave out could shortchange you in the long run, as it will affect the financial outcome of your divorce agreement. Remember that “little” expenses can add up to a lot of money over time. Give every question your most careful, meticulous attention.
Don’t Take Shortcuts
No matter how difficult and tedious the process becomes, please resist the temptation to guess at a response on your Financial Affidavit! Most people who guess at their financial information end up way off the mark, and ultimately, that can do much more harm than good.
Remember You Are Under Oath
A divorce Financial Affidavit is executed under oath, often before a Notary Public. You will have to swear that the information you provide in it is true and correct to the best of your knowledge and belief. Your husband will have to do the same when he files his. So, the Mediterranean cruise he charged to your jointly-held credit card last Spring, or the commission he just got at work, can’t “accidentally slip his mind.” Husbands who hide assets are much more common than you might think, and sometimes it’s through completing a Financial Affidavit and/or a Lifestyle Analysis that women get an inkling this is happening to them.
You should know that anyone who deliberately provides false information on a Financial Affidavit is committing perjury, and therefore can be held in contempt of court and face additional sanctions, including possible criminal charges.
If it comes to your attention that you’ve made an error or inadvertent omission in your Financial Affidavit, or if your financial situation changes, it can and should be revised, even after it has been filed with the Courts. Be aware: This is the official record of your financial circumstances, and it will be used to determine what financial support you can expect during the divorce and afterward. You want the record to be accurate.
Don’t Expect Your Attorney To Spot Errors
It’s likely that your attorney will only scan your Financial Affidavit for extreme inconsistencies or obvious errors. If, for example, you report that your monthly telephone expense is $10,000, or that you spend 90 percent of your monthly income on clothing, they’re likely to question you about that. But if you state on your Financial Affidavit that you spend $10,000 per month on clothes, and this does not represent a widely disproportionate percentage of your income or expenses, your attorney will assume that it’s true, even if there’s an extra zero in there by mistake.
Your attorney just can’t know what your spending habits are – that’s your job. You can’t expect them to correct what you’ve submitted, or to know if you’ve forgotten any but the most obvious expense items.
If You Need It, Get Help
The Financial Affidavit is a painstaking task that falls to you just as you may be feeling least able to cope with it. Many women find it’s well worth it to consult with a divorce financial planner to complete a Lifestyle Analysis and the Financial Affidavit on their behalf. (A Lifestyle Analysis identifies a couple’s spending habits and the day-to-day living expenses incurred during their marriage, particularly in the last three to five years. It includes both recurring and ordinary expenses and non-recurring and unusual ones. A Lifestyle Analysis is often required by the judge, and serves as a verification of the net worth and income and expense statements submitted by each spouse.)
Like many aspects of the divorce process, the Financial Affidavit is not as straightforward as it might seem, and can be fraught with practical and emotional difficulty. I advise all my clients, above all else, to Think Financially, Not Emotionally® while preparing their Financial Affidavits. The information you provide the Courts will be used to lay the foundation for your future financial well-being, and that’s not something you want to shortchange. With so much riding on this official document, it’s well worth your time and attention to do it properly.
Jeff is the author of the new book, Divorce: Think Financially, Not Emotionally – What Women Need To Know About Securing Their Financial Future Before, During, And After Divorce, which provides women going through the crisis of divorce with the tools they need to secure their financial future. He is donating a portion of all book profits to Bedrock Divorce Fund for Abused Women, Inc.
All articles/blog posts are for informational purposes only, and do not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.