Going through a divorce can be stressful, overwhelming and quite often traumatic. With so many moving parts to figure out, determining your Net Family Property (NFP) is a critical step, and usually the first one, in the process of separating the finances between divorcing parties. The timely and accurate completion of your NFP and equalization will greatly assist you and your lawyer in the separation journey.
What is a financial statement?
A financial statement is a legal document created individually and independently by each party in the divorce. Once completed, the document will calculate your NFP which is used to determine the equalization of your matrimonial assets as well as be a source of determining both child and spousal support.
The statement must be as accurate and complete as possible.
What information is reported on the financial statement?
There is a great deal of information contained within the financial statement. The statement requires you to list out many items both at the date of marriage and at the date of separation. The main categories of items reported on the statement are:
- Your annual income
- Your assets at marriage and separation
- Your debts at marriage and separation
- Any gifts or inheritances received during the marriage
- Your annual expenses and living costs
Having backup and documentation which supports the amounts you report on your financial statement will assist you and your lawyer in expediting the negotiations with your spouse and will add credibility to you should your case end up in court and your documentation is reviewed by a judge.
Things to Consider
- Do not rely on your spouse and/or their lawyer to prepare your financial statement for you – Do it yourself!
- You will be signing the financial statement stating it is true, accurate and complete – be sure it is!
- Emotions are high during the separation and divorce process – be sure to park your emotions and prepare your statement based on the facts!
Financial statements may seem overwhelming, however, our team at Accounting for Divorce is here to help. With over 30 years of experience in accounting and taxation, Mark has helped many clients throughout their separation and divorce. As a Certified Divorce Financial Analyst, (CDFA), Mark is able to offer hands-on and practical advice during the separation process. To learn more about AFD and the services offered by Mark give us a call at 416-258-4885.
