Statements of Net Worth
July 18, 2023
This blog is a sequel to one that I wrote in February 2023 entitled “How to Organize Your Finances and Documents.” That post can also be found on this website.
In that prior post I stressed the importance of locating, identifying, and understanding the income earned by you and your spouse during the marriage, as well as the assets accumulated by the two of you regardless of how title is held. We are now ready to take the next step, that is, to apply that information in the context of your divorce.
In a divorce, income, assets, liabilities, and expenses of the marriage are all set forth, along with other financial information, on a court sanctioned document called the Statement of Net Worth. Each party prepares one that must be signed and sworn to before a Notary Public. The Statements are then exchanged so that each party becomes aware of the finances of the marriage as seen by the other party. It is not uncommon that the statements differ considerably. When this occurs, additional financial disclosure will be required. One spouse’s net worth is not definitionally the same as the other’s.
The Statements will form the basis for meaningful settlement negotiations in the divorce, or be used at trial if settlement is not possible.
The Statements are, in my opinion, the financial foundation for the ultimate resolution of your divorce, be it negotiated or adjudicated. New York matrimonial law requires full disclosure, meaning that lack of candor or completeness in preparing the Statement will, if the case goes to trial, put a party who falsifies a net worth statement in a very bad position with the presiding judge. It will increase the amount of time to conclude the case and will increase the cost of the divorce or separation. Therefore it’s important to be both comprehensive and careful when completing your Statement of Net Worth.
By Leonard Klein, Esq.
