If you’re divorcing, be prepared: Your financial life is going to be closely scrutinized, dissected and questioned by your husband’s attorney and the judge.
Fortunately, there is a specific legal format for presenting financial information to the court, formalizing the process and theoretically, at least, helping to ensure no stone is left unturned. If your divorce is contested (and possibly even if it’s not), you and your husband will each be required to file a “Financial Affidavit.” (Note: Financial Affidavits are called different things in different states. In New Jersey, divorcing couples file a “Case Information Statement (CIS).” Meanwhile, the courts in Utah require a “Financial Declaration,” and in Connecticut, it’s simply called a Financial Affidavit. In New York, we use a “Statement of Net Worth.”)
Requirements and regulations vary between states –and sometimes even between counties within the same state! But in general, this official document lists in minute detail what you own and what you owe (assets and liabilities), and what you earn and what you spend (income and expenses).
Completing a divorce Financial Affidavit is both complicated and critical. It’s more involved than reviewing your checkbook register and credit card statements, and it’s important to “get it right” because so much rides on the accuracy of the information you provide. Determination of temporary support payments and the details of the final divorce settlement itself all rely heavily on the contents of your Financial Affidavit.
Plus, both spouses are required to swear, under penalty of perjury, that the information in their Financial Affidavits is true. Granted, that doesn’t mean people don’t lie or “accidentally” forget to include all their income and/or assets. But it does mean the court can impose severe penalties for lying, including awarding 100% of the hidden assets to your spouse. So, however grueling it might be to complete the affidavit, it’s important that the information you provide is as accurate and detailed as possible.
Help is available and important.
You should know that your attorney will probably only review your Financial Affidavit for the most obvious kinds of errors, omissions and inconsistencies. But, he/she is not likely to go through it with a fine-tooth comb. As a result, there is no way for him/her to know, for example, if you spend $200 or $700 per month on clothes. (If your Financial Affidavit shows that you spend $5,000 per month for clothes, your attorney should hopefully question that amount, if it is inconsistent with the rest of your expenses, income, assets and marital lifestyle.)
Be advised: Financial Affidavits, along with most financial aspects of your divorce, are not the forte of divorce attorneys… and that’s why you should consult with a divorce financial advisor, who will complete a Lifestyle Analysis and the Financial Affidavit on your behalf. (A Lifestyle Analysis identifies a couple’s spending habits and day-to-day living expenses incurred during their marriage, with an emphasis on the last few years. It includes recurring and ordinary expenses, as well as non-recurring and unusual ones. Often required by the judge, a Lifestyle Analysis serves as verification of the net worth and income and expense statements submitted by both spouses.)
In working with you on your financial documentation, a skilled divorce financial advisor can spot signs that your husband might be hiding assets. Hiding assets and/or income is underhanded, illegal… and very common. Work with a professional who knows what to look for.
The devil is in the details.
Financial Affidavit forms ask for very specific information. For instance, you will be required to itemize your every expense according to category – from the obvious regular bills (mortgages, vehicles, utilities) to purchases that are less frequent and/or easier to overlook (shoe repair, museum memberships, flowers). Little expenses that don’t seem worth tabulating can add up significantly, and errors or omissions could affect the financial outcome of your divorce agreement.
It can be staggeringly tedious to account for every dime you spend on every category of goods and services you use in your life. But no matter how difficult the process becomes, don’t guess! Most people who just “wing it” end up way, way off the mark, and ultimately, that can do more harm than good.
Technology to the rescue!
Wouldn’t it be great to have a tool to help you keep track of what you spend, so that later, when you have to itemize it all, you can’t get anything wrong?
Enter the CASH™ Smartwatch, a lightweight, wearable expense tracker. It was designed by TV news anchor and finance guru Nicole Lapin, who wants to help women become more financially literate.
“Personal finance is not something that’s necessarily taught in school, and if you’re like me, your parents might not have talked to you about it,” Lapin told me. “So, many women today are lost, confused, scared or intimidated by money management. I saw a void in the marketplace, and I created a tool to help women better understand their personal finances."
CASH™ helps you track expenses you might otherwise forget… cab fare on a rainy day, a bottle of water after a walk in the park, a magazine that caught your eye on the newsstand. With CASH™ on your wrist, it’s easy to account for items like these. Impulse spending and small miscellaneous purchases all get recorded on the spot, so you can’t fail to include it on your Financial Affidavit.
"There has been incredible success with single-function wearables, devices that calculate only calories or steps or sleep,” Lapin explained. “A wearable is a constant reminder –in this case, a constant reminder that you are on the road to becoming financially fit. If you were to use an app instead, you run the risk of being distracted by Instagram, texts or other apps. The Smartwatch is a physical reminder that you are on a mission to financial fitness."
Think about it. A latte, a pack of gum, a tip for someone who helps you out… over time, items like these add up, and they often represent unexplained gaps in many people’s budgets. Leaving these expenses off a Financial Affidavit would result in an inaccurate representation of what it costs to live your life.
"I am really passionate about helping women who are ready to take control of their lives and finances,” Lapin said. “It’s not as difficult or scary as you might expect –once you have the right tools."
The Smartwatch is a stylish way to help record your expenses before your divorce, and help you stay within your budget afterwards. I think it’s a great way to Think Financially, Not Emotionally® -- which is always a smart strategy for ensuring a secure financial future.
_
Jeff Landers is the author of the Amazon best-selling book, Divorce: Think Financially, Not Emotionally – What Women Need To Know About Securing Their Financial Future Before, During, And After Divorce.
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.
For further information, please go to our website at: http://www.BedrockDivorce.com or email Jeff at Landers@BedrockDivorce.com.
