Assets and Debts—Getting it Right on the Sworn Financial Statement

The Sworn Financial Statement is one of the most important documents you will need to complete if going through a divorce or custody case. Also called a “financial affidavit”, it requires each person in the case to use the form approved by the Court and list all income, assets and debts. The Court will use the Sworn Financial Statement to determine how to divide assets and, most importantly, to determine a Party’s need for spousal maintenance or a Party’s ability to pay spousal maintenance.

Completing the listing of assets and debts on the Sworn Financial Statement is easily the most labor intensive part of your divorce case. Not only do you have to think about all the assets you have, determine if it is a “marital asset” (meaning, generally, it was obtained during the marriage) you have to give each asset a value and provide proof of the value, meaning printing out or creating an “electronic file” of whatever was necessary for the calculations; and then sending all of it along with the Sworn Financial Statement to your attorney. Your debts also need to be listed, especially regularly occurring debts that are paid every month.  Often, though, debts are not monthly obligations (like car repairs or vehicle registration) and for all the debts—whether a regular monthly bill or a once a year event—you must provide proof of the debt. That means finding the paper trail or electronic proof—easier said than done.

Listing your Assets: Everything you and your spouse own is an asset.  Even if you do not fully own the item because you are still paying a mortgage or a monthly loan payment, the item is still considered an “asset” and a value must be determined.  A home can be valued based on an appraisal or a market analysis from a realtor minus any amount of mortgage owed. Proof of the appraisal or market analysis and the mortgage statement must accompany this determination of the home’s value. Vehicles, including the car you drive every day, the camper trailer, snow machine and ATV and the Harley all need to be included as assets. Vehicles can be valued based on a NADA or Kelley Blue Book value minus any amounts owed. Again, print outs of the NADA or KBB and of the monthly loan statement should accompany this determination.

Financial investments (mutual funds, stocks, annuities, whole life insurance policies, etc.) and retirement accounts (IRAs, Thrift Savings Plans, 401(k)s and pensions, etc.) are assets and the Sworn Financial Statement requires listing their most recent value and then, of course, providing print outs of the statements as proof of the value.  This is also the procedure for bank accounts (whether joint or individual), health savings accounts, money market, savings, debit, checking and certificates of deposit and any other type of “account” that could be valued. If you have gold bars under the mattress, don’t forget to include those, too. Determining the “marital share” of a retirement account that was started before the marriage can be tricky.  You will want to work with your attorney to determine these values and provide the needed documentation.

Furniture, household goods and other personal property tends to not require the same level or specificity of proof—unless it is particularly valuable and will be singled out for distribution to one person or the other.  Generally, a number to sum up an opinion about the value of all the contents in the home ($10,000, $20,000) is included on the Sworn Financial Statement.  The reason for this is because the “stuff” in the home does not usually have significant enough monetary value to materially affect the division of assets and debts. Courts will not use precious time to divide blenders and sofas and bedroom dressers and big screen TVs and weed whackers and living room curtains and the many other hundreds of items purchased during the marriage.  “Garage sale” values, at best, will be attributed to any list of household items or personal property. This means the $4000 sofa purchased retail will likely be given a value of $200. If, however, an item is considered particularly valuable, an eBay “sold” price for the identical item or an actual appraisal or an insurance declaration may work to establish value.

Jewelry may be listed individually for particular pieces, but, absent proof of current higher dollar values, jewelry will be assigned a value just like everything else in the home.  Any jewelry scheduled with an insurance company or purchased for investment is likely worth getting a present day value. However, often the jewelry in a marriage is a gift—meaning it may not even be considered “marital” and will not be valued and will simply remain with the person who received it as a gift. Wedding rings, while technically an asset, are rarely valued and usually remain with the Party in possession. One exception, if one Party is still paying off the engagement or wedding rings, a Court may be inclined to award the ring to the paying Party.

Artwork of particular importance and guns—firearms of any description–are not generally included in the “garage sale” value concept.  These items can be specifically valued and often the purchase price is adopted as the value of the item. Even miscellaneous items like frequent flyer miles or Star Wars collectible figurines can be valued and considered when dividing the assets.

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Listing your Debts: Just like with assets, material and significant debts must be included on the Sworn Financial Statement.  Any monthly payments—whether mortgage, car payment, insurance, health club membership, massage subscription, Netflix, cell phone bill or utilities—to name only a few, are to be included on the Sworn Financial Statement along with proof of the monthly bill. Bills that occur more frequently (groceries, gas) or only occasionally (oil changes and car maintenance, Caribbean cruises, root canals) can be looked at over a year’s time and divided by 12 months to get a monthly amount.

Credit cards—even those with a zero balance—must be listed with the current balance and the monthly minimum that must be paid. Print outs for 3 or more months of each credit card statement must accompany the Sworn Financial Statement as proof of the debt. 

At The Law Office of Jeanne M. Wilson & Associates, PC, we take the time to learn our Client’s financial picture and determine the proof we need to protect the assets and limit the debts.  It’s that important to us and it is your financial future at stake.