Financial Declarations: What They Are Used for in Family Law and How Do I Complete Them?
Financial declarations are among the most essential documents filed in court for divorce and other cases related to family law. They give the court a general outlook on both parties’ income, expenses, and financial capabilities. From the sworn financial declarations, the court can assess each party’s credibility, lifestyles, and spending behaviors, allowing educated decisions regarding financial obligations for divorcing couples or other individuals in family court.
Court Orders Based on Financial Declarations
It is most often that financial declarations are filed during divorce cases. The client, with the help of a Seattle divorce attorney, drafts the declaration. While the client needs to be very honest and upfront with his financial declaration, a seasoned divorce lawyer can help the client present the information properly and ensure that all important details are before the court. The financial declaration is primarily used by the court to settle disputes involving:
- Child Support
- Spousal Maintenance
- Attorney Fees and Costs
Since many court orders will be based on the financial declarations from both parties, it is crucial to find a credible divorce lawyer in Seattle that you can to help you draft a financial declaration that is both accurate and presented in a favorable light.
Why is it Important to be Very Honest with Your Financial Declaration
We cannot emphasize enough how important it is to file a financial declaration that is true to the last line. It is because financial declarations are sworn under penalty of perjury, which entails that any falsified statement in the declaration is punishable by the law. For reference, first-degree perjury is classified as a Class B felony in Washington state and is punishable by up to 10 years of imprisonment and/or a fine of $20,000 maximum.
Apart from the legal consequences, declaring a materially false statement that will affect the court judgment has its moral accountability. For instance, falsifying financial information just to ensure child custody can jeopardize the future of your own child.
Lastly, you do not want to lose credibility with the court. If you are caught in a lie or misrepresentation the court is not going to believe the rest of the statements in your documents. This can lead to one sided rulings that can impact you for months or even years for more permanent orders.
Keeping Your Personal Information Private
Since the financial declaration must be based on your provable financial records, you must enclose necessary financial documents to support your claims. Some of these documents include:
- Pay stubs for the past six months
- Statements for any bank, savings or investment account for the past six months
- Last two years’ tax returns including W-2s or 1099’s for self-employed
- Credit card statements and other loan or other statements of debt for the past six months
These documents contain sensitive confidential information and should be protected from public access. For this reason, the court provides Sealed Cover Sheets for filing the supporting documents provided with a financial declaration. A Sealed Cover Sheet will protect your information from public access and alert the clerk to seal the submission. You may also redact information such as account numbers to further protect your data privacy. However, you will still need to give the other party a copy of the declaration and documentation as you would with other documents filed in the case.
The Importance of the First Draft
Most family law firms in Washington state will ask you to create a first draft of your financial declaration. This is so that your divorce attorney can review your declaration and advise you on how you can better present your position and disclose all important accounts. Most of the things that will be included in your first draft can be found on your pay stub, statement for bank accounts and other financial documents. Meanwhile, you may also want to include your monthly spending and other financial information to give your divorce attorney more references.
Filing Your Financial Declaration
In most cases, the divorce attorney will file the financial declaration for you, but you will sign the final version before it can go to the court. Because it is a sworn declaration that you ultimately sign, it is best to know what it contains and where you will need to provide information.
Section 1 & 2
The first page of the declaration contains fields for your name and birth date along with a summary of basic information (section 1) and a section for your personal information (section 2). You will need to fill out the portion for your name, date of birth, and personal information. The summary of basic information can be done after completing the last page.
Section 3, 4, 5. Income Information
Section 3 provides detailed calculations for determining your monthly income as part of the financial declaration process. To calculate your monthly income, you need to determine your earnings before any deductions. The average month consists of approximately 4.3 weeks, which is calculated by dividing the total number of weeks in a year (52) by the number of months (12). To calculate your average monthly income if you are paid weekly, multiply your weekly income by 4.3. If you are paid biweekly, multiply your biweekly income by 2.15. If you are paid twice a month, simply add together the two pay amounts for the month. Should you be paid monthly, you can easily find your gross pay figure on your pay stub. This section also includes other fields related to wages and salaries including your spouse’s (should be entered, if you don’t have the documentation estimated), deductions. Section 4 includes a section for the income of other adults in the household, etc. and Section 5 gives you the opportunity to point out any sections where you may disagree with the figures the other party has provided, which is relevant in situations where you’ve had a chance to view a financial declaration that has already been filed.
Section 6. Available Assets
Section 6 provides information on how to report your assets for the financial declaration. Cash on hand refers to the amount of money you carry with you at any given time. Any funds you have in bank accounts, regardless of the type of account, should be listed on the next line. This section also includes stocks, bonds, cash value of life insurance (if applicable), and other savings accounts like money markets, certificates of deposit, or mutual fund accounts. Retirement funds and the value of real estate, such as a house, is not included in this section.
Section 7. Monthly Expenses Information
Section 7 is a crucial section that requires careful completion. It’s important to note that these monthly bills are assumed to be for the future, post-separation period, and should not include expenses that would be shared with your spouse. When estimating costs for utilities and food, consider the living arrangement of your children, if applicable.
Keep in mind that all figures provided in this section should be average monthly amounts. Thus, be wary when computing your expenses that are billed daily, weekly, bi-weekly or monthly intervals.
Section 8-10. Debt Summary
These sections let you identify the specific debts that you are responsible for. If the monthly cost is included in the monthly expense breakdown in Section 7 include that debt in Section 8. If a debt is not included in your monthly budget then add it as a payment in Section 9. Lastly, Section 10 gives you the opportunity to explain any debt if you believe it would help the court and other party determine the right outcome.
Section 11. Attorney Fees
This section is often filled out by the divorce attorney or the family law firm, but it asks for a summary of your arrangement with your attorney and how much you have paid so far.
After completing the form, you may want to go back to section 2 on the first page and finalize the summary.
Did We Miss Anything? Schedule a Consultation With Our Family Attorneys Today
Filing a financial declaration that will put you in a good position for your case while staying truthful is a complex task. Good thing you do not need to face the struggle alone. Let our experienced family lawyers help you every step of the way.
Do you have specific concerns with regard to your divorce case or filing your financial declaration? We are here to help.