The Court Ordered A Statement of Net Worth, Can I Refuse?

Sydney Mitchell:

Hi. My name is Sydney Mitchell.

Matthew Brickman:

Hi, I’m Matthew Brickman, Florida Supreme court mediator. Welcome to the Mediate This! Podcast where we discuss everything mediation and conflict resolution.

(00:13):
Sydney, and I recently had a listener write in and ask a question. I was ordered by the court to submit a statement of net worth. Can I refuse? And if so, how will it affect my divorce case? So I guess it’s important to define what is a statement of net worth. I have never heard that term, so I actually had to go to Google. Um, when I first read that, for me as a mediator, the first thing that came to mind is a financial affidavit. So after going to Google and looking at what a statement of, uh, net worth is, I was right, it’s like a financial affidavit. But let’s first define, because maybe in your particular state, and it’s important to know the laws of your particular state, um, and the terminology that they may use.

(01:14):
But a statement of net worth is a financial tool that shows your financial position at a given point in time. It’s like a financial snapshot that shows the dollar value of what you own assets and what you owe, liabilities or debts. This formula for calculating net worth is assets minus liabilities equals net worth. So to me, as a mediator in the state of Florida, we call that a financial affidavit. And so when a divorce is filed, um, actually we’re gonna talk about divorce and a paternity. So we’ll first start, let’s, let’s start easy with paternity, both a divorce and a paternity action. You have to file a financial affidavit. Um, the financial affidavit starts off with your name, your employer, your income, and then it goes into then all of your expenses. And then at the, um, towards the end of it, it says, okay, just like that says, it says assets minus liabilities equal your net worth.

(02:26):
Um, and that’s a place where then you would put your cars and your, um, jewelry and sports goods and, uh, uh, gun collection, coin collection, put in your credit card debts, the mortgage on your home, uh, whatever your assets, liabilities. There’s also a section for contingent assets and contingent liabilities. So I’ve had before where maybe there’s a contingent lawsuit pending, um, or somebody maybe is expecting a tax return, but it hasn’t come back yet. So it’s contingent. It’s out there but not seen to fruition yet. So, um, in a paternity action, you still have to file a financial affidavit, but all that matters in a paternity action is income. And then, um, medical insurance costs for self medical insurance costs for the children or child and then daycare, aftercare costs, um, all of your things, your home, your bills, your expenses, your bank accounts, none of that matters in a paternity action because there’s no equitable distribution.

(03:35):
Um, so, um, financial affidavit still is required to be filed. So this listener said, well, can I refuse? Sure, you can refuse. And then the judge is going to order it. You have to provide it. There’s no way around it. Um, and so in a divorce action still you have to fill out a financial affidavit. And it is exactly that. It’s a snapshot in time. Now, there are many times in mediation where, um, one party will accuse the other party of lying. I was like, well, that’s not true on the financial affidavit, to where I say, well, I have actually never seen an accurate financial affidavit. And the reason why I’ve never seen an accurate financial affidavit is because just like the statement of net worth, it is a financial snapshot that shows the dollar value of what you own or what you owe at a given point in time.

(04:40):
So usually the snapshot is everything as of the date of filing the divorce action because everything from the date you signed your marriage certificate to the date that you filed for divorce, everything inside of those two dates is marital. And so that’s the snapshot that we’re looking at. We’re not looking at a month after you file, we’re looking at date of filing. That’s the snapshot in time. So usually with a financial affidavit, if there are attorneys involved, let’s say for example that, um, a party filed for divorce on December 6th, well, then what everybody is needing to do is gain all of the credit card statements and get the bank accounts, everything as close to December 6th as possible. Now it may be December 1st because you know, your statements come out on the first of the month, so it could be December 1st, not sixth. Um, values of homes, you know, uh, values of retirement accounts, everything is date of filing.

(05:50):
That’s the snapshot in time that then we’re looking at. Um, and so, you know, if there’s not attorneys involved, well then it’s still the same date of marriage to data filing. Now sometimes it could be a different date, and so why would it be a different date? Well, it could be the date of separation, but that has judicial discretion. Um, you do need to know the laws of your particular state and how they, uh, look at separation, whether there’s a legal separation or not, because maybe that’s the date. Maybe it’s not the date of filing, maybe it’s the date of separation. I will tell you that I had a mediation recently where the parties had been separated for three years. Now, even though there’s no legal separation in the state of Florida, they had legal, they, they had, um, sold their home. They divided the net proceeds 50 50, and then they separated their bank accounts.

(06:54):
Now, they did this when they separated, even though there’s no legal separation, the one thing that they did not separate was both of their retirement accounts. And so then of course the argument came in mediation, well, are we using date of filing? Are we using date of separation? And of course, the argument that came was, well, it should be three years ago as of the date of separation, because that’s when we divided everything else. And of course, one of the parties wanted to use the most recent, so they wanted to use data filing because the accounts had grown. And so there was gonna be more money to divide up if they used data filing rather than separation. So we had to negotiate through that, and the parties did come up with their own agreement. Now, what would’ve happened if they went to court on that?

(07:50):
It would be up to the judge to decide what they wanted to do, um, whether that was to follow suit with everything else they had divided up or just do date of filing. Uh, but this particular couple did not have to submit the decision making authority to a judge to figure out they were able to do it, but we had to have some lengthy conversations, look at some pros and some cons and negotiate, um, in order for them to be able to create an agreement that they could live with with regards to dividing that up. Um, now how will it affect the divorce case? That was the second part of the question. Well, it will absolutely divorce, uh, affect your divorce case because you, number one, you have to produce it and everything is going to be considered for your divorce. Um, unless of course there’s a premarital asset or if there’s a non co-mingled, non-marital asset.

(08:50):
So say for example, an inheritance, um, you know, there, there are a few exceptions and it’s important to, you know, know the rules of your state. Maybe get some legal advice on that. Uh, because myself as a mediator cannot give you legal advice. Um, so what I do as a mediator when I’m engaged to do the mediation without counsel is I always, uh, send over to the parties a PDF of chapter 61 of Florida statutes. That is the entire law as it pertains to family law. And so I give that to the parties to be able to do their own legal research. It’s a pdf. They can keyword the different topics like alimony and it’ll jump to, um, alimony in that pdf so they could read the statute and actually see what does the statute say that is what the attorneys would be giving them legal advice on.

(09:42):
And that is what the judges, um, are following. So I give that to everybody to educate, uh, themselves. But, uh, do you have to complete a statement of net worth? Yes, I have never, and when I say the word never, that means never. Um, in, in all the years of doing mediation, I have never, um, not seen that somebody had to fill out a financial affidavit or a statement of net worth. It’s required. Um, it just depends on what in that statement of net worth is necessary in order to help you through, uh, your divorce. Now I will tell you that it is important to put everything on there. I have had mediations where, you know, certain things were left off, like land property that somebody actually owned. Um, even though the husband and the wife agreed that the husband could keep it, he didn’t put it on his financial affidavit and neither did she, even though it was a marital piece of property.

(10:47):
Um, and so, you know, we did put that into the mediation agreement, and I did put a sentence that says that neither party put it on their financial affidavits, but they acknowledge that it exists. And both parties agree that the husband shall receive it as his sole property in this disillusion action. But it is important to be forthcoming and put everything on there because you do not want somebody to claim fraud. Um, and you know, you don’t want to not put something on there and then go through do the agreement, then it’s discovered after the fact that something was not placed on there. And then they come back claiming fraud, try to open up the divorce case, and then come back and negotiate, um, the equitable distribution of that term because that sometimes whatever that piece is can be used to negotiate other pieces. But if left off and left to negotiate all by itself, then you lose your negotiation power because now it’s just going to be split.

(11:54):
And I have had that before where somebody left off a retirement account or a bank account, like I said, a piece of land. And so it’s very, very important to simply fill out your financial affidavit or statement of net worth because you, you can refuse, but you’re gonna be ordered to do it and it will affect your divorce case. Uh, like I said, it will not affect too much of a paternity action except that you do have to be forthcoming with your income, all sources of income, as well as then a few of your bills and expenses necessary to create the child support guidelines worksheet. So hopefully that answered your question and I look forward to answering more questions in the future.

Matthew Brickman:
Occasionally Sydney and I will be releasing Q & A bonus episodes where we will answer questions and give you a personal shout out.

Sydney Mitchell:
If you have a comment or question regarding anything that we discuss, email us at info@ichatmediation.com that’s info@ichatmediation.com and stay tuned to hear your shout out and have your question answered here on the show.

Matthew Brickman:

For more information about my services or to schedule your mediation with me, either in person or using my iChatMediation Virtual Platform built by Cisco Communications. Visit me online at www.iMediateInc.com. Call me at 561-262-9121, Toll-Free at 877-822-1479 or email me at MBrickman@iChatMediation.com.