Preparing Your Financial Statement
Our Massachusetts Divorce Lawyers Show You How
Rule 401 of the Massachusetts Rules of Domestic Procedure requires every party asking for financial relief to complete a financial statement showing assets, liabilities, and current income and expenses of both parties and their children. If your income is $75,000 or less, you must fill out the short form; should your income exceed $75,000, you must fill out the long form.
The Expense Section of Your Financial Statement
Weekly expenses are calculated on a projected basis for the coming year. In some instances, you may be uncertain of the exact amount. Estimating the cost of an expense is acceptable so long as your estimate is designated as such. There should be no omissions, misrepresentations, or ballpark figures. Provide explanations by using foot notes and addressing issues on the notes page.
Just a Few Tips:
- Do not list expenses by monthly totals. If you have a monthly expense, figure out the weekly figure by dividing monthly expense by 4.33. For example, if you pay $450 per month as a car payment, the weekly expense is $103.93 ($450/4.33).
- Do not duplicate weekly expenses. For example, including and calculating health insurance as a deduction from your paycheck and also including the same health insurance premium as an expense would be improper.
The Asset Section of Your Financial Statement
It is not uncommon to overlook or forget certain assets. Nonetheless, it is critical that all assets are correctly and accurately reported by you on your financial statement, whether jointly or individually held or held in trust.
Be Truthful on Your Financial Statement
You will most likely be questioned about your financial statement by opposing counsel or the court. Opposing counsel is entitled to receive records of your assets, income, expenses, and liabilities to enable verification of your financial statement. The accuracy of your financial statement bears directly on your credibility. Your credibility before the Court will have a direct impact on how they perceive you, factors relating to M.G.L. Ch. 208 §34, the outcome of your case and negotiations.
Failure to provide the court with complete, accurate information may not only affect the outcome, but could result in monetary sanctions being imposed. When you sign your financial statement, you do so under the penalties of perjury. Opposing counsel is going to review your financial statement with a fine-tooth comb. Be prepared by setting aside two or three months’ worth of bills and statements to show how you arrived at each figure.
Advice from a Massachusetts Family Court Judge
Judge Geoffrey Wilson, who recently retired from the Bench, published a list of eight pointers to consider:
- In most domestic relations cases, the financial statement is the single most important document that can be presented.
- A financial statement is an important measure of the litigant’s credibility and can serve as a good indication of their preparedness.
- Financial statements should be complete; if a category does not apply to your situation, you should be sure to indicate a "zero."
- Use footnotes or attachments to support entries where necessary.
- Financial statements should reflect present reality, but at the same time, they should also utilize averages to avoid anomalies.
- If the total weekly income and expenses do not balance, explain how the shortfall is covered or how where the excess is put.
- Be able to explain discrepancies between your present financial statement and any previous statement.
- Even in uncontested divorce cases, it is important to make sure that all financial statements be complete, truthful, and accurate.
Is Your Spouse’s Financial Statement Inaccurate?
At Miller Law Group, P.C., our Massachusetts divorce attorneys are familiar with spouses who are dishonest about significant financial matters. We can retain forensic accountants on your behalf, serve subpoenas on financial institutions and make the court aware of their attempts to mislead the court. For more information, please go through our website and contact us to arrange an appointment with one of our lawyers. We offer free consultations so you can decide, without pressure, whether we are the right law firm for you.