The last 12 months of your marriage has been particularly tumultuous. After a number of confrontations with your partner, you have decided that you do not want to put your children through any more conflict. Cash earned working part-time is being set aside just in case you muster up enough coverage to leave the marriage. Recently, you met with a divorce lawyer to start the divorce proceedings. At the end of the meeting, the lawyer provides you with a Form 13 that outlines the key financial documents you will need to assemble in order to assess what you will be entitled to. You leave the meeting feeling slightly overwhelmed.
How will you begin to put together all of the paperwork required to file for your divorce?
What is a Financial Statement?
Financial Statements are court forms used to evaluate your financial position and determine if you are eligible or will need to pay child /spousal support. The statement also gives a complete picture of your family’s net worth so the court can make a judgement on how your family assets should be divided. In the case of a spouse whose main source of income came from your spouse, you would likely be eligible for spousal and child support.
What’s included in a Financial Statement?
A financial statement includes your income from all sources as well as monthly expenses for any extraordinary expenses related to childcare. You will also need to disclose if you are receiving income to pay the bills from anyone who is currently living with you. Finally, you will need to report the value of your assets on based on three key dates:
- The Date of Your marriage
- The Date you separated from your spouse ( also known as the valuation date)
- The date you sign the Financial statement ( also known as the current value)
Assets on the financial statement normally include the values of Investments, funds in a bank account, the estimated value of cars, household goods and jewellery, as well as real estate assets such as the matrimonial home. Calculate your total assets by adding all of them together. You would then subtract any debt including mortgage, loans or credit card debt that was acquired during the marriage from your assets, in order to calculate your net-worth. Total Assets accumulated during the marriage- Total Debts accumulated during the marriage =Net worth
Why Do you need to file a Financial Statement?
Without knowing your income, or the income of your partner, it is extremely difficult to figure out how much your partner will have to pay, and how much you are entitled to. The courts cannot settle your child/ spousal, or property disputes if they don’t have an understanding of your financial situation. Keep in mind you will be asked for evidence that backs up your need for support if you make a claim for spousal support. The same is true for your spouse who will have to provide proof that they have limited means to support you. Support documents that are typically required when filing financial statements include:
Tax returns, bank statements, investment statements, credit card and loan statements to name a few.
What Assets are Excluded in A Financial Statement?
Gifts or inheritances would normally be excluded from your Financial Statement.
Why is it important to Be Truthful on Financial Statements?
In order for the court to protect the interests of both parties who are making a claim, an accurate financial picture must be provided. You and your ex will also be required to complete a sworn statement that declares the information contained in your Financial Statement is accurate and truthful to the best of your knowledge. To avoid disputes with your partner about the value of your assets, you may want to hire a financial professional to determine the value of your assets independently. If you or your ex are thinking of keeping some of your assets a secret -think again.
It is against the law to knowingly report false information on your Financial Statement.
When Do I need to update my Financial Statement?
If your financial statement is more than 30 days old you will need to update it in order to confirm the values are similar to the original financial statement. A major change to your financial circumstances ( such as a job loss or promotion) would require a brand new Financial statement to be filed with the court. However, if your financial circumstances did not change significantly you would need to include details of the financial change on a sworn affidavit.
Navigating Financial Documents
If you are a spouse who is intimidated by the prospect of getting financial documents, or you were someone who was not intimately involved with the family numbers, consider enlisting the help of a financial organizer who can help you to pull these documents together. Getting a complete picture of your family’s assets is a crucial step in finding out what you are entitled to in a divorce. Know your numbers!!