Divorcing? Consider a Lifestyle Analysis
As part of the New Jersey divorce process, you will need to complete a Case Information Statement – essentially what amounts to a listing of a couple’s financial assets and liabilities as well as income and family expenses. The courts then use this document, in part, to determine such critical financial matters as division of assets, alimony, and child support.
In a perfect world, the information written down on the Case Information Statement would be 100% accurate and complete. But what if you don’t have access to old bank accounts, are unsure how much you owe on your mortgage, and have no idea how much money it takes to pay the bills each month – and on top of this have an uncooperative spouse only willing to supply minimal information? Instead of guessing or estimating – and possibly suffering the consequences of an inaccurate financial record — your lawyer may recommend a process called lifestyle analysis.
Designed to provide a more detailed picture of the financial atmosphere in which you found yourself during your marriage, a lifestyle analysis is a formal accounting of your income, expenses, and assets during the years leading up to your divorce. At the end of the process, you will have an accurate record of your assets and debts, a deeper look into your spending habits and those of your spouse, and a better idea of the financial quality of life you experienced on a day-to-day basis.
In many cases, your lawyer will be able to perform the lifestyle analysis or can refer you to a qualified forensic accountant. Numerous documents will be requested from both of you or will be obtained on your behalf, including such items as past tax forms, income verification, stock portfolio earnings, pension and retirement statements, monthly expenditures and household living expenses, credit reports, bank statements, credit card statements, mortgage statements, real estate sales forms, and business ownerships.
The information collected during a lifestyle analysis can make a crucial difference in calculating alimony and child support amounts. What else can it be used for? Depending on your situation, here are three potential benefits:
Shortly before filing for divorce or during a difficult divorce, some spouses may attempt to hide assets to prevent them from being subjected to equitable distribution. In these situations, the results of a lifestyle analysis can be critical in uncovering a spouse’s hidden expenditures or undeclared transactions and assets. This can include activities as varied as selling valuable art or vehicles, or even (in some rather dramatic cases) siphoning money to offshore accounts.
2. Confirm Extramarital Affairs
A forensic accounting of credit card use and other bank account activity can also confirm or supply further evidence of an extramarital affair. Relevant items that could turn up include plane tickets and trips, gift purchases, restaurant receipts, hidden bank accounts, and rent or mortgage payments made out on behalf of someone else. In turn, this can become powerful information your lawyer can use during divorce negotiations.
3. Help with Post-Divorce Budget
In situations where your spouse was primarily in charge of the family budget, suddenly being the one responsible for budgeting and monthly bill payments can be overwhelming. Because a lifestyle analysis provides you with a detailed picture of how your family spent money in the months and years before your divorce, it’s a powerful tool to help you create a workable post-divorce budget, even for situations where child support and alimony are not at stake.
Is a lifestyle analysis right for you? The lawyers at Weinberger Divorce & Family Law Group, LLC will look at the specifics of your case and offer recommendations on how best to protect your assets and rights to a fair settlement. For an initial consultation, please contact Weinberger Divorce & Family Law Group, LLC at (973) 520-8822.
