Financial Affidavit, Statement of Net Worth, Financial Declaration. Fancy Words for the same thing: a comprehensive snapshot of your financial past, present and future.
What is a Financial Affidavit for Divorce?
In preparing for marital separation—either through mediation or court—both individuals
must prepare Financial Affidavits showing their personal financial histories, presents, and prospects. “Financial Affidavits” are called different things in different states (“Case Information Statement” in New Jersey; “Financial Declaration” in Utah; and “Statement of Net Worth” in New York), but are all essentially the same things: a snapshot of your total financial situation. More specifically, the Affidavit will report on your income from all sources (employer, businesses, investments, pensions, annuities, etc.); your assets (homes, cars, investments, etc.); your living expenses; and your liabilities (mortgages, car loans, credit card debt, etc.). Your Financial Affidavit will be used by your spouse, your attorneys, and the mediator and/or the court, to determine what might be an equitable distribution of your marital assets and who might be entitled to spousal or child support.
How accurate does the Financial Affidavit need to be?
Once you and your attorney and/or financial planner collect all of your financial information and you are confident that the Affidavit accurately reflects your finances, you will sign the affidavit under oath. This means that you will be attesting to the veracity of the Affidavit. The Affidavit will ultimately become a part of the court record and you could face penalties and sanctions if it is found that you deliberately falsified any of the information in the Affidavit. So it is in your best interest, as well as in the interest of achieving an equitable separation, to be honest and forthright.
What if I make a mistake on my Financial Affidavit?
As soon as you realize your mistake, you should bring it to your attorney’s attention. He or she will help you amend the Affidavit and limit potential repercussions from the error.
How do I complete my Financial Affidavit?
You have various options for completing your Affidavit depending on your budget, professional expertise and time constraints.
Professionally-assisted: The Financial Affidavit is a critical part of your separation/divorce as it will determine the total distribution of your marital assets as well as alimony and child support demands. The Affidavit is also a complicated document that requests very specific, nuanced information that is often not as straightforward as it may seem at first blush. For instance, the Affidavit will ask the seemingly innocuous question: “What is your net monthly income from primary employment?” However, if you are paid bi-weekly, your monthly income will not be the same as your gross pay times two. Instead, you will have to determine exactly how many times you are paid in the calendar year, likely 26 times (as opposed to 24 times if you are actually paid just twice per month as opposed to bi-weekly), and multiple this number by your gross income. This is just an example of the complexity in completing your Affidavit and why it is often helpful to work with an advisor and/or attorney to complete it. In future posts, I will discuss how to compute your social security deductions for your financial affidavit.
Self: It is possible to complete your Affidavit without professional assistance. Most states provide standard Affidavit forms with detailed instructions that, with time, patience and attention to detail, you should be able to follow, links to a few states’ templates below:
Financial Affidavit Templates by State:
Disclosures: This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation. Siena Private Wealth, a member of Advisory Services Network, LLC does not provide tax or legal advice.