What is a Financial Affidavit Used for in Divorce?
If you are going through divorce proceedings it is imperative that you fully understand all actions required of you. An important aspect of divorce is filling out a financial affidavit to ensure fair and equitable distribution of property and financial responsibilities. To learn more about these documents and their role in your case, speak with an experienced Morristown, New Jersey divorce attorney today.
What is a Financial Affidavit?
A financial affidavit is a document used in legal proceedings where the parties involved are required to disclose their financial situation. This type of document requires extensive information and every detail of an individual’s financial situation must be included from how they make money to what they spend it on. Financial affidavits are generally required in legal proceedings when a separation of finances is required. This is a sworn document, meaning that by submitting it the party is swearing under oath that the information provided is true and nothing was left out.
There are four main sections of information required on financial affidavits:
- Income: This includes all sources of income including salary, tips, commissions, bonuses, investments, rental properties, etc.
- Expenses: All monthly or yearly expenses such as rent, housing costs, utilities, property taxes, food, transportation, insurance, etc.
- Assets: Any assets owned by the individual must be included such as homes, other real estate, bank accounts, vehicles, retirement accounts, jewelry, and more
- Debts: All liabilities the individual has including mortgages, student loans, auto loans, personal loans, credit card balances, and any other financial obligations
The parties involved will likely be required to disclose any additional financial information that does not fall into these categories like a life insurance policy or if one party owns a business. Any and all financial information must be included in the document.
What is a Financial Affidavit Used for in Divorce?
Financial affidavits are important tools in a variety of legal proceedings, including divorce cases. This document plays an important role in divorce because the process involves separating joint assets and debts as well as assigning financial obligations once the marriage has been terminated.
Asset and debt division is an important part of divorce, and New Jersey is an equitable distribution state. For a court to make a fair decision regarding which spouse is entitled to which property and responsible for which debt, they must first gain a clear understanding of each party’s financial situation.
Financial affidavits are also beneficial when discussing support obligations like alimony and child support. To determine whether a spouse owes the other party and how much, there must be evidence of each party’s needs and ability to pay.
Financial affidavits ensure transparency and fairness during these difficult decisions. Without sworn statements, one spouse could attempt to conceal assets or be untruthful about their financial situation.
