Twice in the last month, the tabloids made much ado about well-known divorcing couples demanding financial disclosure early on in their divorces. In both the Rudy Giuliani and Donald Trump, Jr. divorces, both husbands demanded that their soon to be ex-wives produce a Statement of Net Worth causing the press to sound the alarm that these divorce cases were going to get ugly fast.
While the divorces may get ugly, simply demanding a net worth statement from the opposing side is not a sign of antagonism, it is just good lawyering.
What is a Statement of Net Worth?
The Net Worth Statement may be the single most important document in a New York divorce. As the name connotes, in a Statement of Net Worth, a divorcing party identifies, in detail, every asset, liability, expense, and source of income so as to provide the other spouse and the Court an accurate snapshot of party’s financial position.
The Net Worth Statement not only lays the groundwork for all the negotiations and financial discovery that follows but will also be used to determine the division of your assets, maintenance and child support.
Generally, the Statement of Net Worth is filed with the court before the Preliminary Conference, which is, in most cases, the first court appearance. A revised and updated net worth statement is filed before a case goes to trial.
What Is In A New York Statement of Net Worth?
The form is broken into several sections which include:
- Family Data
This section seeks basic information about the parties and their children, including their age, health, education and employment status
The section requires you to identify most every conceivable expense from rent, mortgage, and other housing expenses, to health and beauty aids to newspaper subscriptions.
This section requires the litigant to reveal every source of income, including from salary, distributions, pensions, and rent.
- Assets and Liabilities
This section requires the party to disclose all assets, including bank and investment accounts, pensions, real estate, cars, collectibles, and jewelry, as well as all liabilities, including mortgages, loans, and credit card debt.
Since the truth of the statements and representations made in the net worth statement are signed and sworn to under oath, any misstatement or omissions open the party up to being punished for perjury in the most extreme cases or simply have their credibility impeached. Once a litigant’s credibility has been impugned, unless the spouse is even less credible, the Court will have little reason to believe any of your testimony.
While your attorney will review your net worth statement, it is likely that only the most glaring errors or omissions will be spotted; people spend drastically different amounts on different expense. What is extravagant to me, may be reasonable to you.
Given the importance of this document, when preparing the net worth statement, be accurate, be complete and be sure you have all the backup to support all of the representations made on your net worth statement.
If you have questions regarding the New Worth Statement or are contemplating divorce, please contact us or call us direct at 212-683-9551.