If your case involves child support, spousal support or property division, it is likely that you will need to compile a detailed listing of your income and living expenses. These lists, when used in court, are called “financial affidavits” or “income and expense affidavits”. The information you provide is used by the Court to determine your income and living expenses. Your attorney will provide you with the forms that are used in your judicial district.
However, preparing this type of list is just as important for mediation, Collaborative Divorce and other types of dispute resolution. In order to negotiate effectively, you need to educate yourself and others about your economic situation. The income and expense list also has the practical benefit of showing you a clear picture of how your money is spent.
Your listing of income and expenses may need to include a list of typical family expenditures in order to characterize your standard of living before your separation. A list of your current expenses is also important. Click here for an excel form to list your expenses prior to the date of separation and here for an excel form to list your current expenses.
In addition to listing expenses, it is important to gather together the supporting documents. Below is a list of financial documents that may provide support for the figures on your income and expense listing:
- Federal Income tax returns – at least the past three years
- Your last 3 paystubs
- 12 months of bank statements
- 12 months of investment account statements
- 12 months of credit card statements
If you own any business interests that provide you with income, you will also need to provide all of the same documents listed above for the business and any financial statements for the business.
The numbers used on these lists should be realistic. You should not guess at what you spend on any expense. Rather, review your bank statements and credit card statements so that you can defend your position. It may be necessary to demonstrate that your expenses are reasonable and necessary.
Some expenses are difficult to pin down. Please ask us if you have any questions about how to address a particular expense. We do not want you to become overwhelmed. Here are some suggestions for gathering or presenting this information:
- For expenses paid annually, divide the total by 12 to create a monthly figure.
- For expenses that fluctuate during the year, average the 12 months of expense and use the averaged figure on your affidavit.
- For expenses paid primarily in cash, you may have to estimate those, but keep notes on how you arrive at your estimate.
- If you live in a household with children or another adult, you need to divide common expenses by the number of people living there. For instance, if you live with your two children, divide the expenses for utilities by 3 and put one-third of it in your column and 2/3 in the column for the children’s expenses.
- When completing a list of expenses prior to separation, it is not as important to divide the expenses by the number of people. However, any expenses only for the children or only for one spouse or the other should be noted.
- Feel free to add other categories of expenses and to only use the ones that are relevant to your lifestyle.
- If you are unsure how to list any particular expense, list it in the blank space and put any comments in the notes section. We will help you finalize this before any official affidavits are prepared.
You should prepare your current list of expenses based on what you are actually spending when you prepare it. If you are not able to afford certain expenditures that you enjoyed prior to separation (such as a gym membership), be sure to provide a list of these expenses and what you would like to be spending in that category.
If you or your spouse work for an employer who gives you a W-2 at the end of the year, then income may be easy to calculate. However, if the employer also pays any of your living expenses, such as gas or cell phone, that employment perk may be treated as additional income. If either you or your spouse operates a small business, the business may pay certain personal expenditures. Personal expenses paid by an employer may be treated as additional income. Funds from any source that are used to defray your living expenses, regardless of other definitions of income, may be considered income for purposes of child support and alimony.
Keep details of all of your actual current income and expenditures until your case is concluded. In court or in settlement discussions, your spouse may question that you actually need as much as you claim or may claim you have higher income than you contend. Having detailed financial information will help you in many ways. If you have any questions about what documents or details you should provide to us, please ask.