Varying State Laws
Divorces are controlled by state law. Therefore, each state has its own requirements with respect to net worth statements. This document is called something different in different states. For example, it is called a net worth statement in New York, a case information statement in New Jersey and a financial affidavit in many other states. Irrespective of the name, the information required in a net worth statement is usually the same. However, you should always check with your specific state or local courthouse to determine what supporting documents you may need to include with your net worth statement.
Contents of a Net Worth Statement
A net worth statement will require you to disclose everything about your family's finances. You will need to state your income from all sources, including your main job as well as part-time jobs or side jobs. You will also need to disclose any money you get from Social Security, disability or funds from a pension. You will also need to include information about all of your assets, including financial assets like bank accounts, stock accounts, bonds and retirement accounts. Assets will also include property, including your home, timeshare or vacation home. You will also be required to list all of your debts, such as credit card debts, car loans and student loans. Finally, you must include your monthly family budget. This is where you explain to the court how much you and your spouse spend on things like rent, mortgages, utilities, food, clothing and entertainment.
Discovery in Divorce
During divorces, each party is allowed to request documents and information from the other side. This is called the discovery process. During discovery, if you list something on your net worth statement, your spouse can require you to provide proof of it. For example, if you list that you have a savings account, your spouse can request that you provide statements from that account. If you claim that you spend a certain amount of money each month on food and clothing, your spouse can make you submit receipts or credit card statements to prove this. The purpose of discovery is to make sure that both sides are completely honest and transparent during the divorce process. For this reason, it is extremely important that you be honest when completing your net worth statement and do not embellish or leave anything out.
Waiver of Net Worth Statements
Although rare, there are some situations in which a court will allow you to waive the requirement of completing a net worth statement. This typically occurs in uncontested divorces where the parties have reached an agreement on every issue in the divorce and do not need a judge to make any decisions. If you and your spouse were married for only a year or two and did not acquire significant combined assets or debts, you may draft a simple divorce agreement and may be able to waive the completion of net worth statements. However, if a judge must make any decisions at all in your divorce, you will likely be required to complete a net worth statement.
Uncontested Divorces That Still Require Net Worth Statements
Sometimes couples are able to resolve almost all issues in their divorce. If a couple reaches a comprehensive agreement with respect to most issues, the court may still schedule a divorce hearing so a judge may rule on any remaining matters, such as child support or alimony. If this is the case, you and your spouse must still complete a net worth statement even though the rest of your divorce is considered uncontested. Also, if your divorce is uncontested but you feel that sometime in the near future you will need to return to court to deal with an issue that is not yet ready at the time of your divorce, you may be required to complete a net worth statement in advance. For example, if your child is an infant but you know that in two years she will be in daycare and you want the judge to determine who will pay for daycare at that time, it is helpful to complete a net worth statement at the time of your divorce to avoid confusion later.