Welcome to the fourteenth episode of Divorce and Your Money Podcast. Your host, Shawn Leamon, MBA and a Certified Divorce Analyst talks about two important financial analyses that you can conduct during your divorce: the financial affidavit and lifestyle analysis.
The Financial Affidavit has a variety of names, including Statement of Net Worth or Financial Reporting Document but with the same goal. It is a legal form provided by the state that shows your assets, liabilities, income, and expenses. It is usually the first document your attorney will ask you to complete. Each state has its own kind of form, with the state’s guidelines shown and specific formatting.
Both spouses will generally complete some version of the financial affidavit. It helps both parties determine what assets existed during the marriage and the likely division. It can be viewed as a balance sheet combined with a cash flow statement. Once completed, it will have to be filed with a court. It is a sworn legal document that shows your income, expenses, and assets. This detailed document needs to be filled out correctly and must show any annual recurring expense. This is an imPortant aspect of divorce where a Certified Divorce Financial Analyst can help you the most.
Lifestyle Analysis helps you understand your standard of living while married. It is an analysis of your cash flow, income, expenses, and how you spend money. A proper analysis will look at credit card transactions and bank transactions and reconcile them so that they can be easily understood, and that everything is analyzed properly so that it it consistent with how you and your spouse lived.
A Lifestyle Analysis is usually easier to understand and use than a Financial Affidavit. It will give you a better overview of how your lifestyle looked while you were married. A well-conducted analysis will flag any missing assets or anything suspicious. It covers a longer time period than most Financial Affidavits and provides more comprehensive information.
Key Learning Points:
- A Financial Affidavit is also called a statement of net worth or financial recording.
- It is a legal form that shows your assets, liabilities, income, and expenses.
- Once completed, it will have to be filed with a court.
- A Lifestyle Analysis is a more detailed analysis of your cash flow, income, expenses, and how you spent money.
- Every state has different laws that govern these matters.
Thank you for listening to the Divorce and Your Money Podcast. We hope the show helps you through one of the most difficult periods of your life. Shawn Leamon is also the author of Divorce and Your Money: The No Nonsense Guide. One-on-one divorce coaching services are available at www.divorceandyourmoney.com.
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