Completing the required Sworn Financial Statement in any family law case is an unpleasant, yet necessary, task. It is time consuming and ponderous, anxiety-inducing and oddly illuminating. No matter how it is viewed, the hardest part of the Sworn Financial Statement is getting started. Don’t wait. Try to make some progress each day.
What to do first:
Gather documents. Whether you save them on a computer or print and label them, this is the first step. Many of the monthly expenses you have to provide will be on credit and debit cards and auto-payments from bank accounts for mortgage payments and utilities. Get 12 months of statements for each card and account so you can total up a years’ worth of expenses (for example, groceries or recreational activities or movies) and divide by 12 to get the average monthly amount.
Some of the documents you will need to gather for each Section of the Sworn Financial Statement are:
Section 1: Pay statements (3 months), most recent W-2 or 1099, 3 years tax returns, social security, disability and retirement pay statements. From these documents, you will be able to complete Sections 1 and 2 of the Sworn Financial Statement.
Section 3, A and B: Mortgage statement, rent statement, leases, utility bills including water, gas, electric and trash, monthly phone charges and contracts. To determine a monthly utility amount, access 12 months of bills for each category (trash, electric, water, etc.) add them up and divide by 12. That is the average monthly amount you can put in the designated box on the Sworn Financial Statement. Auto payments from a card or bank account can also provide the necessary information.
Section 3.C: Grocery and supply bills are often included on credit or debit card statements and gathering 6 months of these can give you an idea of how much you spend for groceries and supplies. This is often the best guestimate of the monthly amount, ranging from $200/mos. for one person alone to $1000 plus for a family with 3-4 children. Dining out expenses are also usually included on debit or credit cards and a review of monthly statements can give you an average value to include on the Sworn Financial Statement. Remember to include Amazon charges, if applicable, although it is often difficult to recall the specific purchase when it is reflected only as “Amazon”.
Section 3.D: Healthcare costs in addition to insurance premiums can be found from specific bills you received, or payments made on a debit or credit card. You will want to have documents supporting the average monthly cost (add a year of them up and divide by 12) because you may have to prove these are actual expenses you pay.
Section 3.E: Car payment statements for all vehicles, car insurance bills, costs of registrations (on the registration card), regular parking fees often on a credit or debit card, repairs to your car (divided over 12 months for an average cost) will also be needed.
Section 3.F: Child-care cost statements—may be monthly receipts or a longer statement showing many months of payments, tuition statements, permission slips/statements for school activities to give you an idea of the monthly cost.
Section 3.G: Any education costs for you that you currently pay should include the bills and a class schedule and prior schedules and grades, if applicable, so you can prove your full-time/part-time student status.
Section 3.H: For spousal maintenance or child support, list amounts you currently pay monthly—even if there is no Court order yet for payment.
Section 3.I: Miscellaneous expense debts are often included on debit or credit cards (to determine a vacation amount, amount spent on veterinary services or pet food, movie and video rentals, hair, nails, clothing, etc.) which will all be added up for a year and divided by 12. Keeping proof of these debts can be important if they are higher than usual—such as a $4000 veterinarian bill that will need to be explained. If there is no credit or debit card proof, no canceled check and you do not have the actual statement for a large bill, you may have to contact the proprietor to request a receipt. One unusual expense that many people forget to add—but almost everyone incurs–is for gifts to others for birthdays and holidays. When a year’s worth of gifts is added up and divided by 12, it is not unusual for $100/mos. or more to appear. You will have to explain how you arrived at this number, and a list of the gifts you gave for the prior year will help the Court understand this expense—and evaluate whether it is reasonable or excessive.
Section 4: the most recent credit card statements and loan documents will provide what is needed. Peruse the statements to get an idea of what charges are included so you can give a general description of the charges contained.
Section 5.A: The “Assets” category will require documents that provide the current value of the asset and any debt that is owed on the asset. Mortgage statements that show the full amount owed on real property and an appraisal, market analysis or Zillow type listing can provide the value needed to complete this section.
Section 5.B: Kelly Blue Book or NADA values for all vehicles, trailers, RVs, etc. as well as any loan statements showing the amount still owed will be needed for Section 5. B. of the sworn financial statement.
Section 5.C: Current bank statements for all bank accounts of any description will be needed so you can list the balance of the account. Remember, checking accounts that are used to pay household bills can seem flush with cash when paychecks come in—but nearly empty when all bills are paid. A statement reflecting an average balance after the monthly bills are paid may provide a more accurate understanding of your assets.
Section 5.D: provide the life insurance documents indicating the insured and the beneficiary. This includes an SGLI for service members.
Section 5.E: For the section labeled “Furniture, Household Goods and Other Personal Property” it is a usual practice to list individually only expensive/valuable items (specific jewelry, electronics, firearms, artwork) while assigning “garage sale value” to the rest of the household items. Garage sale value, I explain to my Clients, is something like “in the history of all garage sales ever held, a sofa—no matter how much it cost to purchase—likely never sold for more than $200”. It’s a garage sale—not retail. A blender–$10. A bedroom suite–$600, but likely less. A barbecue grill–$50. Clothing and purses and shoes $1 apiece. Toys–$.25 each. “Tools”, which often include a range of hand tools and power tools sell in a range of a few dollars each to the very low hundreds for complex power tools.
Sections 5.F and G: For any stocks or bonds, statements of current value suffice. Employee stock options will need full documentation as to value and when vested. Reserve stock account documents including payout projections may be necessary for valuation. For retirement accounts such as IRAs, 401(k) accounts and pensions, current statements suffice. Pensions may need to be valued later in the dissolution process, but your attorney can guide you on additional documents needed for that process.
Section 5.H: Miscellaneous documents will depend upon the asset. Some of the more common ones included are sick leave statements from paychecks, frequent flyer mile accounts and IRS refunds from tax returns.
Section 5.I: “Separate property” may be proven by documents such as a will explaining an inherited classic car, or pre-marital statements from a retirement account. Such documents may not sufficiently segregate the item as “separate property” since a Court ruling is necessary regarding any disputed separate property. However, it will allow you to make the claim and proceed with further proof.
There is no getting around the burden of complying in good faith with the Sworn Financial Statement and disclosing the applicable documents to the opposing party. Looking at the task as a chance to learn the financial health of your family and check-up on your finances and budgeting, will make the process somewhat tolerable. Your attorney—and especially the attorney’s paralegal—can help you complete the Sworn Financial Statement and remove some of the unpleasantness inherent in completing financial documents.