In a divorce setting, both spouses are required to submit a financial affidavit. This document is also referred to as a “financial statement” or “financial declaration.” Whatever the name in any given state, it is an official document that is supposed to provide a complete statement of the person’s current financial status.
It provides a detailed listing as well as an overview of the person’s income, expenses, assets, and liabilities, e.g., debt. Each party is required to swear that the information provided in their financial affidavits is true, accurate, and complete.
Each state may have different definitions and requirements for divorce financial affidavits. Also, different jurisdictions might refer to the documents by different names, such as “Financial Declaration,” “Statement of Net Worth,” or “Case Information Statement.” The information gathered from a financial affidavit may be used for various purposes, especially when it comes to dividing property and calculating support amounts.
Most states require both spouses to submit financial disclosures in a divorce case. In some states, however, it may be possible for the spouses to agree that it is not necessary. This is true, for example, in New York, where the state’s Rule 11 allows the spouse to both agree in writing that completion and submission of financial statements is not necessary.
Of course, spouses who might want to forgo financial disclosure want to make sure that the rules in their state allow this option. Again, failing to file the disclosure if it is required without exception could lead to bad outcomes. They should keep in mind that the goal of the divorce process is to ensure a fair distribution of marital assets and debts.
What Should Be Contained in a Financial Affidavit in a Divorce Case?
Many states provide people with forms they need to use for their financial statements in a divorce case. Some states even provide more than one form.
For example, in Missouri, there are short and long forms. The short-form divorce financial statement is for people who make less than $75,000 per year. The long-form financial statement is for people who make over $75,000 annually or people who are self-employed.
In Missouri, it is important to use the correct form because the form plays a role in determining how a couple’s assets are divided. The form is also important for determining child support and alimony payments.
In some states, a person must have the signature on their financial disclosure statement witnessed by a notary.
At first glance, completing and submitting a financial affidavit for divorce might seem straightforward. However, it can often be a challenging task that involves a number of considerations.
For instance, a person may be required to supply more information than a simple bank account or credit card statement. Depending on the requirements of the law in the state in which a person is getting a divorce, a financial affidavit may involve the following:
- Complete listings of all assets owned by each spouse as well as assets acquired during the marriage;
- Listing of all debts owed and any other liabilities, including debts owed to friends, relatives, or business associates for money borrowed from them;
- Statements regarding earnings as well as spending, i.e., income and expenses;
- Descriptions of other factors, such as business ownership, academic or educational attainment, securities, and other assets;
- Information regarding spousal support or child support;
- Other financial information, depending on the case.
The value of some assets may not be clear and should not be estimated. For some assets, a person may have to hire a professional appraiser to provide a reliable appraisal of its fair market value. This would be true for real property, a car, and an interest in a business.
In addition, a divorce can take time. It is not necessarily a quick or easy process. As the process progresses, a person’s financial situation may change. For example, a debt may be paid off or a new one taken on. As a result, a person may need to make changes and updates to their financial affidavit. So, both parties want to continue to keep close track and update their financial statement regularly.
What if There Is a Dispute Over a Financial Affidavit?
Financial affidavits are intended to equip the spouses, their lawyers, and the court with the information they need to make decisions about the financial aspects of a divorce case.
However, the financial affidavit itself can often become a source of disputes and legal issues. One of the more common violations in this regard arises when one party attempts to hide assets from the other during the divorce hearings.
In a divorce, each party is required to make full disclosure of their accounts, other assets, and debt so that the court can issue appropriate orders regarding child support, spousal support, and division of the couple’s assets and liability.
Failure to disclose assets in a divorce can lead to negative legal consequences, such as a contempt order or even criminal consequences in severe cases. These types of violations and other conflicts over financial statements may require additional legal hearings and representation.
The judge in a divorce proceeding has the power to decide how to deal with a spouse who is found to have been less than completely honest in their financial disclosure. When one spouse fails to completely report all income, expenses of the household, assets, and liabilities in their financial disclosure, one effect might be that the judge makes a different division of assets and liabilities than they might otherwise have made.
This may then mean that the person who did not disclose some relevant information may be given responsibility for paying off more debts, loans, or a larger portion of the mortgage. The other spouse may be allocated a greater share of assets, property, or business interests. If the custody of children and payment of child support are at issue, this different treatment might affect the amount of child support or spousal support payments.
Of course, a judge would consider all of the circumstances and whether they indicate an intentional withholding of relevant information or an honest oversight. But even an honest and innocent mistake may have negative consequences. For that reason, it pays to be careful in completing a financial disclosure.
One of the parties may not make an accurate financial disclosure and attempt to hide assets. If that is the case, it could serve as grounds for setting aside a divorce settlement when the lack of disclosure is discovered.
Do I Need the Help of a Lawyer for a Financial Affidavit for My Divorce Case?
Divorce affidavits may require a thorough analysis of the person’s entire financial situation. You may want to consult a qualified divorce lawyer if you need help with any financial matters during a divorce. LegalMatch.com can connect you to an attorney who can help you with your property listings, account statements, and other issues. Your attorney can help ensure that your financial statement is complete and accurate. It is important to follow all state affidavit requirements in order to avoid legal penalties or negative consequences.