The Importance of Lifestyle Analysis
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If you are in the beginning stages of a divorce, there is a good chance your attorney has requested that you begin to compile important financial information concerning your assets, bank accounts, and monthly expenses. These documents play a crucial role in determining how much spousal or child support one party will need to pay to their ex-spouse during, and after, a divorce.
STATEMENT OF NET WORTH
In New York State, the document detailing each spouse’s assets, liabilities, debts, and monthly expenses is known as a Statement of Net Worth (SNW). Each party is required to execute a SNW and file it, along with copies of their recent tax returns, with the court.
It is recommended that you meet with your attorney while preparing your SNW, since it is a very detail oriented document. Your lawyer will request you provide them with copies of bank statements, investment accounts, and outstanding debts, along with mortgage or property documents. Information from these documents will be inserted into your SNW, and will determine your net worth by subtracting your monthly expenses from your income.
A SNW is required in contested New York divorce actions, so it is recommended that parties begin to compile relevant documents at the commencement of their case. Using an assets and liabilities checklist can be a great guide and organizational tool for those who find themselves especially overwhelmed during their divorce.
What is a Lifestyle Analysis?
A lifestyle analysis helps to establish your marital standard of living, with a focus being given to the last several years of your marriage. The goal of an accurate analysis is to provide evidence to the court detailing each spouse’s lifestyle, so each party can try to maintain the same standard of living once the divorce is settled.
It is a well-known fact that supporting two households is much more expensive than supporting one, and because of this, it is unlikely that the exact marital standard of living will be met after divorce. The burden of proving to the court that a certain amount of financial support is needed falls upon the party requesting the money. A Statement of Net Worth, along with a basic lifestyle analysis, will help to prove financial need.
It is typical for the petitioning spouse to request a higher amount of support in the beginning stages of divorce, and then after negotiations with their ex, settle for a lower amount of alimony. Because financial litigation is a very technical process, it is not recommended that you attempt to negotiate a financial divorce settlement on your own. The only way you will receive a fair and equitable settlement is if you retain the services of a qualified matrimonial or family law attorney.
WHY IS IT IMPORTANT?
As stated previously, a lifestyle analysis is important because it outlines a couple’s finances and gives a clearer picture of how much money is needed to maintain the marital standard of living. The analysis can also help to uncover hidden assets during the beginning stages of divorce.
Hidden assets are a very serious and real concern in contested high net worth divorce actions. Either out of anger, or in an attempt to alter the amount of spousal maintenance to be paid or received, one party may attempt to swindle away or hide marital assets. This can include tangible and intangible property. There are many ways to hide assets, including selling physical items and not reporting the sales, giving property to family members, or making extravagant purchases like new cars, jewelry, or vacations.
If you suspect that your spouse is hiding assets, you need to address your concerns with your attorney as soon as possible. Bank records and financial documents can be subpoenaed and compared to the information listed in your ex’s SNW. The court does not look fondly on those who are found guilty of trying to hide assets, and it can leave a negative impression with the judge for the remainder of the divorce case.
FINANCE FOCUSED DIVORCE FIRM
A comprehensive and accurately prepared lifestyle analysis and statement of net worth can make a world of difference in your divorce settlement. Without one, you may not get a fair or equitable financial settlement or enough alimony to support your family. Hiring an experienced matrimonial law attorney is crucial to having a successful divorce. The family law firm of Brian D. Perskin & Associates P.C. has been representing New Yorkers for over 20 years, advocating on their client’s behalf to ensure that they are able to support their families post-divorce.