The All-Important Divorce Financial Affidavit
Anytime two people are going through a divorce in Orlando Florida one of the first documents that their Orlando divorce lawyer will ask them to complete will be a financial affidavit.
A financial affidavit is the most basic and necessary piece of financial discovery that is exchanged in a divorce case and is mandatory in every divorce even the simplest uncontested divorces.
The financial affidavit can be described as a sworn written statement that provides the lawyers and the divorce courts with an accurate snapshot of what your current financial situation consists of.
This is important during any divorce case because issues such as child support, alimony, and division of assets require very accurate knowledge of the incomes, expenses, and assets owned by each party.
Unfortunately, it is extremely common for people to attempt to be dishonest when completing these financial statements. More than half the time a financial affidavit received by our divorce law firm, when closely compared to pay stubs and bank statements, substantially understates the income that’s actually earned by the person who completed the affidavit.
Sometimes this is an accidental error, however, the majority of the time these are intentional misrepresentations of the parties’ income for the purpose of either paying lower support or receiving more support than they should be.
There are four main sections to the financial affidavit that your divorce lawyer should understand
Some of the most important sections of the financial affidavit include the income section, the expense section, the asset section, and the liability section. I will describe them one by one and provide a brief explanation of each.
The first section of the legal financial statement for a divorce is the income section. This portion of the form will specify the place of employment, the gross amount earned through employment, and provides spaces for any income from other sources such as alimony, self-employment, investments, and other income sources to be listed as well.
The next section of the affidavit is the expense section. In most jurisdictions, the expense section lists expenses in terms of monthly costs of living for the individual completing the financial affidavit.
The affidavit has blanks that are labeled with nearly every type of personal expense that you can imagine such as rent or mortgage, electric, insurance, food, meals outside the home, cell phone bills, gas and tolls, clothing, daycare, hygiene, charitable donations, and many more.
Want to see if a divorce litigant is being dishonest about their income? Check the expense section of the financial affidavit.
When divorce attorneys are trying to decide if a party is being untruthful about their income this is often the first section they will look at. This is because if an individual has $5,000 in monthly expenses but according to their affidavit only earns $2,500 per month then they are obviously receiving financial assistance somewhere.
This could be self-employment income, part-time under the table income, or regular recurring financial assistance from family or others which the law says should be counted as income for child support calculation purposes.
The next important section of the affidavit is the asset section. This is the portion of the form that will list out all of the items of value that are owned by the individual. These can include real estate, automobiles, boats, investment, and retirement accounts, collectibles, checking and savings accounts, and many more.
This is also a very important section because it can also be a very useful place to pick up the trail on someone who is not being honest about their income.
What happens if somebody lies on their financial affidavit?
Finally, there is the liability section of the affidavit. This section is extremely important in divorces because one of the most common items to be divided during divorce these days is marital debt. It is extremely important for divorce lawyers to be able to accurately identify and value all marital debts so that they are divided during the divorce in a way that is fair and equitable under the law.
One thing that I always advise my divorce clients on is the importance of being honest when completing the financial affidavit. This must be done in a completely transparent way even if the numbers are not going to be favorable for your client in one or more issues of the case. This is because if the judge finds out that your client has been dishonest on their financial affidavit then the court can assume that other areas have been lied about and the court can assume and impute higher-income numbers to your client then they actually make which can be catastrophic in alimony and child support cases.