coMMon Mistakes to aVoiD When preparing a financiaL affiDaVit
Collaborative law Section Chairs : Cory Brandfon – Harris Hunt & Derr , PA & Shannon Green – Westbay CPAs
the financial affidavit is an important document and care should be given in its preparation . With that in mind , be cautious in its preparation and avoid these typical errors and mistakes .
Afinancial affidavit
prepared by each party is necessary in both litigated family law cases and collaborative family law cases . In litigation , it is used to report income , assets , liabilities , and expenses of each party . In collaborative family law cases , it is also used for both sharing of information and , eventually , for filing with the collaborative settlement agreement . The financial affidavit is an important document and care should be given in its preparation . With that in mind , be cautious in its preparation and avoid these typical errors and mistakes .
Double Dipping People often list the total monthly amount paid on their credit cards under the “ monthly payment to creditors ” section . If there is a previous balance on the credit card statement , then some of the current balance may relate to prior spending and some might relate to current spending . It is important to understand how credit cards are being used to be able to accurately reflect them on the financial affidavit .
If the balance paid on the credit card is for expenses in the current period , then it should not be listed under the section “ monthly payments to creditors .” Itemizing the payment here is “ double dipping ,” as the expense is already reported elsewhere on the affidavit .
However , if the credit card balance relates to spending for previous periods , then it is appropriate to show the minimum payment due and this would not be a double dip . If you are using family law software to prepare financial affidavits , the software helps to clarify the intent of “ monthly payment to creditors ” by including in the description of the category “ only when payments are currently made by you on outstanding balances .”
Please see the screen shot below that shows the note , for reference .
Understating Income
Another common error made in financial affidavit preparation is failing to reflect all sources of income . In addition to the wages / salary earned from working a job , you and your client must consider other sources . For
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