In the divorce process, whether mediated or litigated, one of the most important documents is the statement of net worth. It is a document that outlines the financial health of each party.
There are several sections. One section outlines the family data and budget such as how many children are in the home, dates of birth of both parties and the children, occupations and employers. Another section deals with income from all sources, jobs, investments, even disability or pension benefits. Yet another section contains information regarding assets such as cash accounts, real estate, vehicles, jewelry, art and life insurance. Finally, there is a section on liabilities such as credit card debts, loans, mortgages, back taxes and other assorted debts.
From all of this information, the net worth is calculated. Then the document continues to have sections on legal and expert fees already paid for and how much more is anticipated. Should either party have other relevant information, it can be noted toward the end. The document is signed by the party, notarized, and if attorneys are being utilized, the attorney for each party must certify that to the best of their knowledge the document paints a true and correct picture of the financial situation of the client.
The statement of net worth is supposed to have attachments added to it, such as recent W-2 forms or Schedule K forms and tax returns. Often parties will exchange the statement of net worth shortly before or at a meeting known as a “four-way,” where the parties and their respective attorneys meet to try to negotiate a settlement. The statement of net worth is important in deciding the issues of child support, maintenance and equitable distribution. The document provides enough information to be able to predict the likely outcome in court with enough accuracy that the parties can save a significant amount of money and time, not to mention stress, by agreeing to a settlement.
Deborah E. Kaminetzky, Esq.
Kaminetzky Law & Mediation, P.C.
132 Spruce Street
Cedarhurst, New York 11516