Today, I would like to talk to you about a very special document called, the Financial Statement. You are going to have to complete one if your family matter involves support or property division, so it’s something you may need to get familiar with. If you have looked at one before, it can be pretty intimidating, but it’s really more bark than bite. So let’s try to take the bark out of it too.
What is a Financial Statement?
Well, it’s a form that serves multiple purposes. First, it confirms how you earn your income and how much income you earn. Second, it shows what you spend that income on, and whether you have some money left over every month, or whether you are spending more than you make, like most of us. Third, it shows if there is anyone you are living with who is helping you pay your bills. Fourth, it shows the value of all your assets on three important dates; 1. Your date of marriage or the date you started living with your spouse; 2. The date you separated from your spouse; and 3. The day you sign the Financial Statement. Fifth, it shows the value of your debts on those same dates. And sixth, it lists any property you are allowed to exclude as property of your marriage by special rules. When you are finished filling in all the blanks on the Financial Statement, you are going to sign it and swear that the information in it is true to the best of your knowledge, and you are going to have to do this in front of a Commissioner for Taking Oaths and Affidavits. This is very important, as accurately and truthfully disclosing your entire financial situation is vital to resolving your family law issues. So it’s probably a good idea to have a document, such as a bank statement or the like, to give to your spouse to show where you got every numbered entry on your Financial Statement.
Why do we use Financial Statements?
Well, expanding on what I just told you, your income is key to figuring out how much you may have to pay in child support, and how much you may receive or have to pay in spousal support, so confirming how much you actually earn is crucial. Second, if you want to claim spousal support, you may be asked to show you have a need for the support, and if you do not want to pay spousal support, like every support payor, you may be asked to show you do not have the means to pay, as such showing if you have a monthly surplus or deficit is also crucial. Third, if someone is helping you pay your bills, this would also be relevant to whether you have a need or the means to pay spousal support. Fourth, if you have property from your marriage or relationship to divide with your spouse, we need to know the value of the property you gained from the date you married your spouse until you separated, and we also want to know how much debt you added during that same time period because you are allowed to deduct that from the net worth of the property you will eventually divide with your spouse. Plus, we need to know the value of any items you are allowed to exclude from the net worth of the property you gained during your marriage. Why do we need to know the value of what you have on the date you sign the Financial Statement? That goes to the issue of spousal support, as if your net worth increased from the date of separation you would have a harder time saying you need support or that you can’t pay support.
What happens next?
When both spouses properly complete their financial statements, well let me tell you, then the real magic happens. We can now confirm how much child support should be paid, how much each parent should pay towards any special and extraordinary expenses for the children, how much spousal support may be paid, and how much one spouse may have to pay to the other to equalize their property. See, I told you it was magical, because almost every issue you have with your spouse can be resolved by using the Financial Statement. As such, you should ensure your Financial Statement is properly completed, and you may want to consider consulting with an experienced family law lawyer to help you.
Thank you for watching today. If you need more information and wish to schedule a consultation, please visit our website at www.separation.ca or contact our office at 905-415-1636.