My New York Matrimonial And Family Law Attorney Provided Me With A Statement Of Net Worth To Fill Out For My Divorce Proceeding And I Am Having Problems- Do I Need To Complete The Statement Of Net Worth? Why Is The Statement Of Net Worth Important In Divorce Proceedings?

Author: Michael L. Fried, Esq.

Once you retain an attorney in a divorce proceeding, you will be provided with a blank Statement of Net Worth form to complete. Even if you never intend to step foot into a courtroom, you will need to prepare and sign a Statement of Net Worth. If your spouse is not providing you with enough support during the divorce proceeding, you will need to attach the Statement of Net Worth to your request to the Court for temporary support. The Statement of Net Worth is a time consuming and difficult form which requires a great amount of attention and precision since it is the most frequently scrutinized document by opposing counsel and the Court. The Statement of Net Worth is also the most important document that you will prepare in your matrimonial proceeding as it is a sworn document in which you are setting forth your monthly expenses and income as well as the present value of your assets and liabilities. This document will be reviewed by opposing counsel and the Court if you choose to litigate the matter.

Fortunately, as your matrimonial attorneys, we will work together with you in order to insure that your sworn Statement of Net Worth is accurate and complete. Ultimately, you will prepare a first draft of the Statement of Net Worth on your own. Once completed, you will either fax or e-mail the form to our office. Our staff will type all of your responses on the form for my review. We will then schedule a time to meet together to review your draft Statement of Net Worth and make any necessary revisions. Most often, I will request further information and documentary proof as to your expenses, income, assets and liabilities which may require further research and work on your part. Don’t be discouraged, this is a normal occurrence and is done to insure that your Statement of Net Worth is accurate and can withstand scrutiny by the opposing attorney. Prior to starting your Statement of Net Worth, please review the following five (5) most frequently asked questions pertaining to this document:

(1) WHAT DOCUMENTS DO I NEED TO PREPARE THE STATEMENT OF NET WORTH?

The most important documents that you will need in order to begin the preparation of your Statement of Net Worth is your checking account statements for the past twelve (12) months and/or check register for the past year. The second page of your Statement of Net Worth begins the most challenging part of the document, namely your monthly expenses. If you pay certain expenses by check, such as the mortgage or utilities, your bank should provide you with your cancelled checks which are often photocopied and attached to the end of the statement in miniature size. If you don’t get photocopies of your cancelled checks with your statements, request copies from the bank or review your check register which should have a list of the payees and amount of each check you wrote each month.

If you charge expenses for such items as food and clothing, you should also review the last twelve (12) months of statements while preparing your monthly expenses for the Statement of Net Worth.

You should also be prepared to provide the most recent balances of all of your checking, savings, money market accounts, brokerage account statements, life insurance cash surrender values, retirement account statements, credit card statements, student loans, mortgage and home equity line of credit statements. Therefore, it is important to provide me with your most recent statements. If you throw out your statements, you must end this practice immediately. You can resume throwing out your statements once the case is resolved if you choose. Nevertheless, for purposes of preparing your Statement of Net Worth, you can request a copy of your most recent statement from the bank and/or call the bank for your current balance if you are having difficulties securing the statement.

Finally, you will need your last three (3) paystubs (if applicable) to complete the income portion of your Statement of Net Worth in order to provide your current monthly gross income and monthly deductions in order to arrive at your monthly net income. You should also provide a copy of your last filed Federal and New York State tax return (as well as any corporate tax returns if applicable) as this document must be attached to your Statement of Net Worth.

If you don’t have this documentation, do the best you can to request copies of these documents from the bank. If this is not possible, the last resort is to write on your Statement of Net Worth that the "information and documentation is in the possession of my Husband/Wife"

(2) CAN I LIST MY EXPENSES ON A WEEKLY OR ANNUAL BASIS?

Typically, the expenses listed on the Statement of Net Worth are on a monthly basis. If you only know your weekly grocery expense, multiply that number by 4.3 to arrive at the monthly expense.If you know that you spend $1,200 per year on life insurance premiums, divide that number by twelve (12) to determine the monthly expense. It is important that you consistently list your expenses and your income on a monthly basis.

(3) I AM SELF-EMPLOYED AND RECEIVE A MONTHLY DRAW AND PAY ESTIMATED TAXES- HOW DO I COMPLETE THE INCOME PORTION OF THE STATEMENT OF NET WORTH?

A large percentage of our practice focuses on representation of self-employed professionals such as doctors, lawyers, owners of closely held corporations that do not receive a W-2 form at the end of the year. In these instances, we will work closely with your business accountant to illustrate your monthly gross draw and pro-rate your estimated taxes. When you contact your accountant, please have him or her send me the past three (3) years of individual tax returns if you file as a Sole Proprietor (i.e. Schedule "C") or an "S" Corporation (i.e. Schedule "E") and/or the past three (3) years of corporate tax returns if applicable. While you are on the telephone with your accountant, please give him or her authorization to speak directly to me.

Your accountant is the best source of information to provide me with the information that I will need to complete the income portion of your Statement of Net Worth. Do the best you can to fill out the form and we will make the necessary revisions during our mutual review of the Statement of Net Worth.

(4) I RETRIEVED TWELVE (12) MONTHS OF STATEMENTS FOR MY 401(K). HOW DO I ENTER THE NECESSARY INFORMATION REQUESTED ON THE ASSET PORTION OF THE STATEMENT OF NET WORTH?

On the asset portion of the Statement of Net Worth, you must list the type of account you maintain. For example, if you have a 401(K), you will write "401(K)" on the line for type of asset. On the next line, you will list the institution that maintains the 401(K) and the last four digits of the account number. For example, "Smith Barney account number 123456". The next line will provide the name of the title holder which will be either "Husband" or "Wife". Below that line you will insert the "date of acquisition" which will be the date that you acquired the asset. While I would prefer a precise date, if you only know the month or the year of acquisition please insert that information on this line. The "date of acquisition" entry and the "source of funds" entry are the two (2) most important lines on the asset portion of your Statement of Net Worth especially if you have property that was either acquired before your marriage or by gift or inheritance or was acquired with funds received prior to marriage or by gift or inheritance as these assets may be determined to be your "separate property" and will not be distributed to your spouse. Finally, it is important to use the balance listed on the most recent statement available to you. You should not list values on assets such as automobiles, real estate, personal property or collectible items. Rather, you can simply state, "Unknown-To be determined".

(5) SHOULD I ASK MY SPOUSE FOR ASSISTANCE TO COMPLETE THE STATEMENT OF NET WORTH?

No. Your Statement of Net Worth should be done independent of your spouse. Do not ask him or her for assistance nor should you be helping him or her. If your spouse asks for your help, politely respond that you have been advised by your attorney not to work together on the document. Once we are finished working on the document and you sign your Statement of Net Worth, I will contact your spouse’s attorney or your spouse if he is unrepresented. We will schedule a date to exchange your Statement of Net Worth with your spouse’s attorney.

We represent individuals in abusive and deteriorating marriages who need to move on with their lives...If you have questions that need answers about your particular matter herein in New York, we invite you to call our office to schedule an appointment for a consultation.