Monthly Archives: January 2012

Financial Statements in Massachusetts divorce

There are two financial statement forms required for a divorce case, a short form for those with income of $75000 or less and a long form for those with income higher than $75000. Filling out these forms is a source of much pain and suffering for clients and for lawyers. They will be redone frequently because each time you go to court they have to be current.  The form itself is difficult and most lawyers and clients end up making changes, adding footnotes and in other ways supplementing what is asked for by the form. There is no  guidance in the rules of Court as to how to fill these out, so what does a client or lawyer do?

The first rule is make sure everything is accurate and honest and that no asset or source of income is left off the form. This can especially be a problem for clients who have cash businesses and don’t report all their income to the IRS. As divorce lawyers we must insist that ALL income whether reported to the IRS or not be shown on the financial statement form. Divorce lawyers are required to sign the form indicating that to the best of our knowledge it is accurate. It is not our problem or our desire to give advice about how to deal with the IRS.

The second rule is Explain, Explain, Explain. If your expense is an estimate, make sure it says so somewhere in the form or the footnotes. If your income is unpredictable and it is sometimes higher and sometimes lower, make sure you put it in the footnotes. Anyone filling out this form should assume(even though it is unlikely) that they will be cross examined on the witness stand about EVERY blank that is filled in and every footnote.

The last rule is to take the financial statement seriously. The most embarrassing moment in a divorce trial is usually when a client is cross examined on a hastily prepared financial statement with tons of inaccuracies . Don’t let the problems with filling out the form get you stuck. Make your best first effort at a draft, keeping in mind all of your questions and problems. Take this into your lawyer and get his/her help in answering any questions you have. No lawyer should simply hand a form to a client and ask them to fill it out. It is equally problematic to have your accountant fill out the form because the accountant will make assumptions and conclusions without informing you of any of their assumptions or conclusions. Preparing a financial statement is a collaboration in some sense because you want to involve everyone who has information and can be helpful, but in the end it is the person signing the form who is on the hook if there is a mistake. These are signed under the pains and penalties of perjury. Make sure you understand every line in the form before you sign it and take your time to get it right.

Does alimony reform affect when I should file for divorce? Absolutely!

Typically when divorce is contemplated by one or both spouses, the actual complaint for divorce may not be filed in court for many months, or even at all.  During that initial time period, the parties may be in negotiations or may have reached an informal agreement about custody, child support and spousal support for the… Continue Reading

Buyer’s remorse over separation agreements in divorce

We can all relate to the following scenario: after many long and grueling hours on the phone and in meetings, you and your client have settled his divorce outside of the courtroom.  Everyone is relieved that they only need to go to court once, and that is to have their separation agreement approved by a… Continue Reading

The real losers in alimony reform: Stay at home spouses in long term marriages. Is there any wiggle room?

Those paying alimony have been pretty vocal in their praise of the new alimony law the details of which are found here. One of the principal “reforms” is to terminate alimony at the payor spouse’s federal retirement age, regardless of whether the payor spouse is in fact retired.  For current payors of alimony in their… Continue Reading