It is never too late or too early to become more educated about your finances. If you are or may become involved in a divorce, you will be required to fill out a financial statement. The financial statement is the most important document filed in any divorce matter for a number of reasons: it reflects each spouse’s income, expenses, assets and debt, upon which support formulas are based; it reflects financial information the judge must consider regarding division of assets and debt; and it must be signed “under the pains and penalties of perjury”. This means there are criminal sanctions in the event income or assets were either not disclosed, or information provided was intentionally untrue or significantly inaccurate. Therefore, the completion of a financial statement should not be taken lightly or done without an adequate opportunity for reflection.
Whether you are investigating your finances for the purposes of divorce, or because you simply wish to take a more active role in managing your finances, the financial statement provides a helpful road map to becoming an expert in your own fiscal affairs. The court financial form includes four basic sections: (1) income (2) expenses (3) assets and (4) liabilities; all of which will assist you in developing your financial literacy.
The simplest place to start is with the income and expenses. Tax returns, pay stubs, and bank statements reflecting deposit activity can assist you in becoming more educated about household income. Bank and credit card statements will help you identify the operating expenses for your home, such as mortgage payments, utilities, food, and house supplies. If your spouse controls the family budget, and he/she uses a joint account to pay bills, you are entitled to access to your account and review any activity. If your spouse is withholding access to joint account information, you should contact the bank and obtain copies of these records. If your spouse has restricted your access to all historical finances, you can start fresh and at least obtain understanding of your own purchases. There are Apps, which track your finances, set monthly budgets based on your usual bank activity and can be useful in assembling the expense section of your financial statement.
Assets and debts can be more difficult to understand if you are not directly involved with day-to-day management. First and foremost, you should obtain your credit score from all three major credit reporting bureaus. The credit report should list all outstanding debt in your name. You should review this to make sure you know your liabilities, and to correct errors in your credit report, which occur frequently and can impact your credit score substantially. Information regarding assets you may hold, individually or jointly, including without limitation bank and retirement accounts, real property, personal property and/or other financial accounts, can be obtained from several sources. Your tax returns may list accounts from which you are receiving interest. Once you determine institutions where assets may be held, you can contact them directly and request they search for accounts in your name or associated with your name. To obtain information about real property in your or your spouse’s name, and debt associated therewith, you can perform a search with the registry of deeds for the county in which said property is located. If you have a homeowner’s or tenant’s insurance policy, there may be items of personal property with significant value listed individually in riders to your policy.
If you are the beneficiary of a trust, the trust may be an asset or a source for a stream of income; perhaps both. This is a complex area that should be left to professionals to determine how best to proceed. However, you should contact your trustee to obtain at least a basic understanding of the trust and your interest in the same.
Finally, you may also want to consult with a financial professional to help you become more aware of, and involved with, your finances. Whether for the purposes of divorce or personal development, you will benefit significantly from understanding your own fiscal footprint in 2015, so you can plan for your future.
-Elisabeth R. Feeney, Esq.
