Reasons to Be Honest on Financial Affidavits in a Divorce
In determining the division of assets, as well as calculating any spousal or child support, a divorce court must have a picture of a couple’s financial situation. In Minnesota, divorce courts require a financial affidavit, a declaration made under the penalty of perjury of a couple’s assets, liabilities, income and expenses. Only with this financial snapshot can a judge make an “equitable distribution” of the marital assets between the parting spouses.
However, presenting an accurate portrayal of the financial situation is often harder than it sounds. It usually requires combing through years of pay stubs, tax returns, bank records, credit card statements, loan and mortgage bills, canceled checks and more. Every regular and irregular expense should be taken into account. As if the process alone were not nerve-racking enough, the financial figures determine what a spouse gets out of the divorce and misstatements could lead to perjury charges.
One way to help ensure the accuracy of a financial affidavit is to seek the help of a divorce financial planning expert to perform a “lifestyle analysis.” The analysis is a detailed and comprehensive review of assets, liabilities, income and expenses. In sum, a lifestyle analysis establishes a standard of living for the marriage, which a judge considers in dividing the marital estate and determining support payments to help maintain that standard.
A lifestyle analysis can also catch nonrecurring and occasional expenses and uncover a spouse trying to hide assets. It is not unusual in a divorce for a spouse to siphon money into secret accounts, fail to disclose stock holdings and 401(k) accounts, or slyly use money to buy physical assets (like cars and artwork) and hide them during the divorce proceedings. The discovery of such dishonesty can give the other spouse significant leverage in the division of assets.
A truly accurate financial affidavit can result in a significantly higher divorce settlement than using “guesstimates” to arrive at financial figures. Honesty in preparing the document is crucial as intentional misstatements under oath to a notary public constitute perjury. Moreover, the dishonesty can result in a monetary penalty and a sanction in the form of a reduced asset award. Depending on the judge, the court could hold you in contempt, fine you and even put you in jail.
If you, or a loved one, are considering a divorce, contact an experienced divorce attorney to discuss your situation, your options and how to receive every penny you deserve.