Understanding Financial Affidavits
In all legal actions that include claims for child support, post-separation support, and/or alimony, the local family court rules for Buncombe County require each party to complete and file with the court a “financial affidavit” (local Form 4). The financial affidavit is a legal document that provides a template for each party to an action involving spousal support claims to itemize their average monthly expenses and incomes and provide basic information regarding their assets and debts. A party seeking to establish or modify child support in which there is a deviation from the child support guidelines must also itemize the average monthly expenses incurred on behalf of the minor child. The party who initially files a claim for child support, post-separation support or alimony must be the first one to file a financial affidavit.
The parties’ respective financial affidavits provide a foundation to assess the needs and expenses of the child, of the party seeking post-separation support and/or alimony, as well as the ability of a parent or spouse to pay child support, post-separation support, and/or alimony. As a hypothetical and simplified example of an alimony claim, consider the following: A dependent spouse has average monthly expenses of $4,500 and monthly income of $2,100; therefore, the dependent spouse would have an income-expense discrepancy of $2,400. ($4,500 -$2,100 = $2,400). Therefore, $2,400 would generally indicate the amount of spousal support the dependent spouse is seeking. Likewise, the difference between the supporting spouse’s average monthly income and his/her expenses provides an indication of the discretionary income that is available to pay post-separation support or alimony.
Mistakes or omissions that are made in completing your financial affidavit could be damaging to the outcome of your case. Examples of pitfalls to avoid are as follows:
· A party may inflate his/her expenses in hopes of receiving more (or paying less) child support or spousal support.
· A party may underestimate his/her monthly expenses or omit certain expenses.
· A party may attempt to suppress his/her income in an effort to reduce or minimize a support obligation, or in an effort to receive more support.
Any of the above scenarios may negatively impact your case. If a judge finds that you are deliberately inflating your expenses or minimizing your income, it could undermine your credibility and possibly result in a less favorable ruling. On the other hand, underestimating or failing to identify all of your expenses could mean that you receive less spousal support or child support than you need, or you may be required to pay more support than you have the financial ability to pay. Additionally, if a judge finds that a party is deliberately suppressing his/her income in an effort to avoid or minimize a support obligation, the judge may impute income to that party.
Keep an eye on our blog for part two on understanding financial affidavits, where we’ll offer tips and walk you though the process of filling out your financial affidavit.
This article is intended for information purposes only and is not to be considered or substituted as legal advice. This article is based on North Carolina laws in effect at the time of posting.