In concept, a financial affidavit is a simple document. It is a sworn statement of your income, expenses, assets, and liabilities. Both parties must file and serve a financial affidavit in a divorce/child support/alimony case. This is the most crucial document that will be looked at by the court.
Employment Information. There's nothing complicated here. "Rates of pay" could cause some confusion. Since the affidavit is based on monthly income and expenses, some people think that the rate must be stated that way. It needn't ; if your income is based on an hourly rate, you should insert the hourly rate. Remember to take a look at the formulas in the instructions section. Those formulas basically account for the fact that there are more than 4 weeks in a month. Thus, if you made $100.00 per week, it would be calculated at follows 100 X 52/12. Some people are paid every other week (26 times per year). Others are paid by monthly (2x per month). So, make sure that you know when you get paid and how you get paid. Important note, persons who are self employed need to differentiate between any W-2 income that they receive versus profits that they receive, as self-employment income as these are taxed differently. Persons on disability may or may not be taxed on the money they receive.
Overtime is another loophole. Some spouses develop "RAIDS" during a divorce. (RAIDS is "Recently Acquired Income Deficiency Syndrome") One of the ways they get it is by refusing to work any overtime. Even if an average of 20 hours of overtime was available each week for the last ten years, it always seems to disappear during divorces. And it seems like he'll never have overtime again. Sometimes, attorneys inadvertently encourage that type of conduct. I'd like to believe that judges see through it and impute the overtime income in the absence of compelling evidence that work conditions have truly changed. I think it has to be reported and that you shouldn't change your overtime work pattern unnecessarily. (It sometimes can't be avoided because separations often impose schedule changes on fathers because of contact with the children).
Deductions from Income
Make sure that you account for all state (especially if you live outide Florida), federal income taxes, and FICA, mandatory (not voluntary 401K's) pension contributions and the cost to you of your own health insurance. If you are on a family plan, you may need to talk to your HR person so that they can tell you how much the cost of your own insurance is as opposed to your children.
Expenses. You need help to do the expenses well. But I think it is unwise to work with your attorney on the initial effort. Remember, you're paying your lawyer between $3.00 and $5.00 a minute (yes a minute!), and he or she probably won't be as good at this type of work as your accountant or, even, you and your best friend. We have already decided that your expense listing should be based on your records, your foreseeable future needs, and the immediate expenses related to the divorce. That decided, the task is easier. (Let me remind you again, however, to follow your attorney's directions. If he or she instructs you to approach your financial affidavit differently than I suggest, follow those directions. The only exception; if your lawyer should instruct you to use the affidavit to mislead the court, get a new lawyer. You shouldn't be paying anyone for that kind of advice.) Lastly , the expense section has lots of areas for duplication. Dont exaggerate or duplicate expenses.
More Stuff about Expenses
Expenses. Now we come to the hard part. We can make it a little easier by breaking it down into parts. The parts are going to be (1) documented history, (2) adjustments for future needs, and (3) temporary expenses.
More Stuff about Expenses 2
The documented history is made from two sources, income records and your checkbook. Let's deal with the checkbook first. You need to make a "spreadsheet" to start off. A spreadsheet is a large sheet of paper, usually at least 25 inches wide, with rules and vertical columns; you can buy them at any stationery store. You should tape them together in pairs, side by side, because you are going to need a lot of columns. You then write, across the top of the columns, the expense categories listed on the financial affidavit, one to each column. On the left, from top to bottom, list every check you have written for the last six months (or, preferably, the last year) and its amount. Now comes the easy part. Decide, for every check, which expense category
Assets. Make a list of your major assets first. Put down your house, your cars, bank accounts, stocks, etc. Then, start putting down every little item you can think of. Your jewelry (item by item), your furniture (as a whole), any collection you might have, any debt owed to you. Put down your pension and any profit-sharing interest you may have. Do it for yourself and your spouse so that you have everything on paper. Next, pull out tax returns for the last few years and see if you listed all of your income from stocks, bonds, or bank accounts. Check any bank financing statement that you filled out during more peaceful times. Then sit down with a friend and ask him or her to start naming things your friend thinks you own. You don't have to show your list; you'll be surprised how often a friend will remember something you've forgotten. If you're in the house , walk through it a few times, looking in every cabinet and closets for things of significant value you may have forgotten.
More Asset Stuff
Then sit down with a friend and ask him or her to start naming things your friend thinks you own. You don't have to show your list; you'll be surprised how often a friend will remember something you've forgotten. If you're in the house , walk through it a few times, looking in every cabinet and closets for things of significant value you may have forgotten. Don't forget the pictures on the wall; some of them may be valuable. If you have a safe deposit box, go to the bank and look though it. Finally, look through your checkbook to see if there are any relatively large checks for big items.You will have some trouble with valuation. We all tend to overvalue our processions and that's generally not to your advantage in a divorce. The criterions not what an article is worth to you; rather you must assign the price that an arms length sale would bring. An "arms-length" sale is one between a willing seller and a willing buyer, neither of whom is under any coercion to sell or buy.
Liabilities. Debts are nothing more than negatives assets. You find them in much the same places: income tax returns, checkbooks, etc. You can start by listing the obvious ones: house mortgage, car loan, credit card balances, etc. Don't forget to list any debt you owe your attorney. List any loans you still owe to relatives. Liabilities rarely present problems. Be sure, however, that you check any promissory notes carefully.Often, a note/mortgage on property owned by one party was signed by both parties. If so, list the debt even if you don't want, or expect to receive, the property. One tricky aspect of this is the fact that while you probably only have rights to half of a joint asset, your are 100% liable for the joint obligation on it.
Most people dont have these. However, if you have a pending personal injury case in which you are the victim, this would be a contingent asset. Since you don't know whether you are going to receive $1.00 or $1,000,000.00 put TBD in the blank. If you are being sued because of a car accident or audited by the IRS, these would be examples of contingent debts.