The parties to a divorce action must file a statement setting forth a listing of their income/ expenses, and their assets/ liabilities regardless of which county the case is pending. Some jurisdictions require that you file that statement at the onset of the case with the initial pleadings while other jurisdictions will require it be filed at a later date such as a settlement conference, which can occur anywhere from four (4) to eight (8) months after litigation commences.
This article will give a brief overview as to the varied uses of a financial affidavit in divorce litigation.
In Cuyahoga County each party is required to complete a four page Pretrial Statement and submit it to the court seven (7) days in advance of its first pretrial. One can find this form on-line at the Domestic Relations Court’s website at www.domestic.cuyahogacounty.us. This is a four (4) page document setting forth the following information:
- Caption of the case, along with basic information about the individual party
- Gross Monthly Income
- Itemized Monthly Deductions
- Net Monthly Income
- Debts and Obligations.
- Total Monthly Expenses.
- Property and Assets of the Parties (including real estate and business interests)
Each party shall sign the completed pre-trial statement in front of notary public. They can be used for and are important for a variety of reasons.
- A pretrial statement helps an attorney understand his client’s case. Someone who is not familiar with domestic relations law can use this document as a check list to make sure they have all of the financial issues covered. Going through a pretrial statement with a client can be a very valuable tool for their own lawyer in better understanding and evaluating his/her own case. Don’t simply have you client fill the paperwork out and submit it to the court without reviewing the same with your client. Counsel should explain to his/her client what the document is, you should go over some of the various types of expenses and help assist them in filling this out. Sometimes you can’t get the expenses detailed out because they vary from month to month, but at least get them within a reasonable range that can be supported by documentation. This is the key. Each practitioner should make sure that his/her client’s expenses can in some way be documented. There is a very good chance that they may have not documented these expenses prior to coming into your office or initiating a divorce action. That being said, once you have filed a Complaint for Divorce on behalf of your client you should be instructing them to keep very detailed records of that they are spending their money on. This document also forces a party to examine and see in black and white the reality of their income, expenses and debts in deciding a true and accurate picture and how best to proceed in settling this matter in his or her best interests.
- The opposing party’s pretrial statement is the starting point for discovery. The other side’s representations will dictate what information you must subpoena from third sources. If the other side has not completed a pretrial statement in a manner that sheds light on the other party’s financial information (i.e., not fully completed and does not identify all assets), then counsel must make it an issue and get that resolved. Without getting the correct representations as to the other parties’ financial status, the how can you protect your client’s assets.
- A pretrial statement is your client’s first representations to the court as to the parties’ financial status. If your client makes incorrect representations this could prejudice your client for the reminder of the case. Expect your client to be cross-examined about the contents of the pretrial statement. Likewise, if the opposing party has filled out an incomplete or exaggerated pretrial statement you will be able to attack that party’s veracity by showing that the expenses listed are indeed false or cannot be supported by the documentation.
- The reality of pretrial statements is that they are limited in what they can explain. The Cuyahoga County Pretrial Statement provides two lines for a party to explain their separate property interests. Separate property interest is that property which is one spouse’s property and not subject to division between the parties. Examples of separate property include premarital property, inheritances, personal injury proceeds and gifts given solely to one party. There are many instances where there are multiple items of separate property. Since it is the obligation of the party asserting that they have separate property to prove the same, then it would be wise for counsel to explain the identity and tracing separate property and to attach that to the pretrial statement. The key here is that you always have the opportunity to include other attachments to your pretrial statement that would help to explain and expense or a disposition of how an asset should be disposed of. Therefore, it is your obligation to trace the separate property, and then attach an explanation describing the separate property and how it accrues.
- If the case was filed more than a year ago and the matter is now coming to trial, you may want to sit down with your client, go over the pretrial statement and to amend it if necessary, if any of the expenses or income have changed. There are many times where the parties may have paid off a car, paid off a debt, increased debt, or increased expenses since the filing of the divorce. More often than not, people just have a better handle of their expenses after the divorce process has been going on for a while.
- These pretrial statements are a complete financial representation of the parties. Most divorce cases will settle, and if they do settle, they are based upon the representation that the parties make. If you are worried about a party failing to disclose an asset then, even in the context of a Dissolution of Marriage, have them fill out a pretrial statement, exchange it and reference it in a Separation Agreement. A simple clause that states that the parties have entered into this agreement based upon the financial representations as exchanged in pretrial statements between the parties, is one protection for your client if their spouse has hidden assets which are later discovered.