After you have filed and served your spouse with divorce papers, the clock on your proceedings officially begins ticking. If you have not done so already, you need to begin the legwork of gathering important documents and evidence to help build your side of the case.
One of the first (and arguably most important) tasks in the divorce process will be filling out your financial declaration, which provides the court an overview of your monthly income, bills and general expenses.
Each party is required to submit their own affidavits, and the judge will use these documents to determine a variety of issues in the case.
It is crucial that you are upfront and honest with your financial declaration, as omissions — whether intentional or accidental — can result in damage to your credibility, court-issued penalties or financial obligations you cannot afford.
An overview of financial declarations
Like most aspects of divorce, there will be differences in the forms, process and even what it’s called depending on your location — you may have to submit a Financial Declaration, Financial Affidavit, Statement of Net worth or some other variation based on where you live.
No matter what your state calls it, however, the form boils down to the same purpose — giving the court an accurate overview of your monthly income and expenses via an itemized list of earnings vs. expenditures.
This document will be used to determine how a number of issues in your case are resolved, such as the need / ability to pay spousal support, child support, attorney fees and property division.
Due to the extensive list of areas this document affects, it is imperative that you pay close attention to even the most minor of details when you are filling out your financial declaration .
First of all, the financial declaration is considered a sworn statement under penalty of perjury.
If it is discovered that you deliberately mislead the court regarding your financial status — perhaps you owned an asset you didn’t think your wife knew about — it can result in major penalties ranging from a simple slap on the wrist to jail time depending on the severity of the deceit and how it impacted the case.
Even accidental omissions or misrepresentations on your financial declaration can affect your divorce, resulting in lost credibility with the judge, inequitable distribution of property or support obligations that are more than you can handle.
For this reason, it is crucial that you gather documentation or supporting evidence to verify any expenses you claim.
It may be extremely tedious to track down everything you need, but a common reason many people run into trouble on their financial declaration is due to making wild guesses instead of taking the time to confirm that the information is accurate.
What you need to include in your financial declaration will depend on your individual circumstances, so ask your attorney for a complete list based on your situation.
However, there are several common documents that you can compile early in the case to make your life a little easier when it comes time to fill out your financial declaration. These include:
Tax returns — you will need copies of both federal and states tax returns for at least the previous two years before the divorce was filed. If you own a business, you will likely need to provide copies of your business’ returns as well.
Pay stubs — gather pay stubs for the previous 12 months from any job you may have held, both full- and part-time.
Financial statements — this includes statements from checking and savings account, credit cards, investment accounts, retirement accounts, etc.
Real estate information — make copies of any and all real estate documents that include the value of your home, such as the most recent appraisal or refinance documentation.
Loan information — this includes auto and personal loans that have been opened or closed within the past 12 months of filing.
Bills — collect several months’ worth of bills, including but not limited to, utilities, cable, Internet, cell phone, medical, day care, pet care, car repair, etc., to help determine an accurate figure for your average monthly expenses.
The purpose of gathering all of this documentation is not only to ensure you are truthfully representing your monthly income and expenses, but to also provide the ability to back up your claims if the opposing party questions the accuracy.
Unfortunately, this is one area where your attorney can only help you so much — they do not have an inside look into your earnings and expenditures over the past several years.
It is up to you to report correct information, and then follow your attorney’s advice on how to present it to the court.
Filling out your financial declaration
While the forms for each state will vary, they are typically broken down into categories / sub-categories that will include a section for basically any expense you can incur.
The layout of the forms may be different, but both require a lot of time, thought and math to be put into verifying where your money is coming from and how it is being spent.
When it comes to your income, not only must you report your paycheck, you also need to calculate how much overtime, bonus money, tips, commission, investment / retirement income, etc., that you average each month.
Since many of these sources are not regular installments like your salary, you will likely need to go back through several years’ worth of documents and average what you made per month over that time to come up with your monthly figure.
Your attorney can provide you with more information on the best practices for reporting variable income in your state.
As for expenses, you are able to itemize essentially anything you could possibly spend your income on, ranging from essential bills like a mortgage and utilities to more trivial matters like entertainment.
You want to ensure you fill both categories out thoroughly and do not forget to leave out any details, as anything you forget to add may count toward your “expendable” income, possibly opening yourself up for larger support payments.
Gathering as much supporting documentation as possible will also help in case the judge or opposing party feels you are over or understating your income and expenses.
It cannot be stressed enough how critical it is to file an accurate financial declaration at the onset of your case.
Due to the number of important issues that your financial declaration will impact, you want to be absolutely certain every penny, nickel and dime are accounted for.
While your attorney can assist with filling out the forms properly and advise on how to report certain types of income and expenses, they rely on you to report accurate information.
Your attorney has experience presenting information in the best possible light; however, the worst thing you can possibly do is try to hide something only to have it catch your attorney off guard in a later court hearing.