In all divorce cases it is required that the parties each complete a Financial Statement. The Financial Statements are exchanged between the parties and filed with the Court. Financial Statements are signed under the pains and penalties of perjury, therefore itis imperative that the information contained on your financial statement be accurate and contain all the required information.. For example, if one party fails to include an asset in his/her Financial Statement, that asset is subject to division even after the Separation Agreement has been approved by the Court. It is important to distinguish who owns an asset listed on your Financial Statement; you only want to list the interest and dividends income produced by assets that you own. Where assets are jointly owned, you should include only one-half (1/2) of the dividend and interest income and make this indication on the Financial Statement.
Although Financial Statements are filed with the Court, they are impounded to protect your personal information; this means that access is limited to the parties, attorneys of record and the court. Your Financial Statement must include all of your income. If you are self-employed you must file a Schedule A to your Financial Statement. Much of the information needed from the Schedule A may be taken from your income tax returns; however some deductions on your income taxes are not deductions for purposes of your Financial Statement. For example, a depreciation deduction is appropriate for income tax purposes but not on your Financial Statement.
In addition to disclosing assets, parties must set forth their actual and anticipated expenses on their respective Financial Statements. It is not uncommon to have to estimate expenses particularly in cases where the other party was primarily responsible for the finances. It is important to make a footnote indicating that these expenses have in fact been estimated. Furthermore, reasonable anticipated expenses should be footnoted.
In a divorce matter, a Financial Statement is given great weight by the court in reviewing the assets and expenses of the parties, and therefore should be completed with great care and caution. Should you require assistance in the preparation of a Financial Statement you should contact the family law team at Baker, Braverman & Barbadoro, P.C. – Lisa Bond.
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