Posts Tagged ‘finances in divorce’

How Lying About Your Finances in Your Divorce Can Hurt You – And How You Can Avoid Problems

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lying about finances

Finances can be one of the main points of contention in a marriage – and in a divorce.

In contested divorces, and even in some uncontested divorces, each party is required to fill out and file a financial affidavit with the court. This is a self-reported document that includes information such as income, assets, average expenditures, and debts. It helps all parties get an idea of where final assets and debts should be distributed upon final separation.

Because these documents rely solely on self-reported figures, there can be the temptation to fib a little – or a lot – about the actual numbers. If you misrepresent your finances on your financial affidavit, can it hurt you?

Answer: YES.

What is a financial affidavit, and why is it important to be truthful on one?

Financial affidavits are official court documents that, once signed, become entered as your sworn testimony regarding your financial situation. If you lie on this document, you are lying to the court.

Lying to the court can present a range of penalties. At the very least, expect a good tongue-lashing from the judge when your deceit is discovered. Depending on how serious your untruth, lying on a financial affidavit could mean that your spouse is awarded a larger portion of the marital assets, something that could negatively impact your financial situation for many years to come. [1] Submitting an untruthful financial affidavit also can be considered perjury, a misdemeanor offense punishable with jail time. [2]

In an extreme example, a Los Angeles judge awarded an ex-husband the entirety of his ex-wife’s $1.3 million lottery winnings. The wife failed to disclose the prize, which she won just 11 days before filing for divorce, and the judge determined the omission was made with malice. [3] The wife attempted to conceal her prize and her deceit was discovered and she lost out on all her winnings, not just the half she would have surrendered had she been truthful.

How can I avoid being untruthful on my financial affidavit?

Mistakes and omissions on financial affidavits aren’t always malicious. However, even small, unintentional mistakes can spell bad news for you in court. To avoid a misrepresentation on your financial affidavit, first consult with an experienced family law attorney who practices in your area. [4] An attorney can help you gather the documents you need to fill out the financial affidavit, and can work with you to identify any items that may be missing.

When filling out your financial affidavit, take your time. Rushing to complete the document easily can lead to overstating expenses, understating income, or leaving out an asset or debt. Gather as many pay stubs, statements, and receipts as you can find in order to completely fill out your financial affidavit. It is better to send more information to the court than to send too little, which can pique suspicion.

What can I do if I feel I’ve been untruthful on my financial affidavit?

Financial affidavits can be amended. If you realize you omitted or misstated some figures, contact your attorney and work to submit an amended financial affidavit with the correct numbers as soon as possible. [1] It is better to refile a financial affidavit if you realize a mistake has been made than to wait and see what happens. If the judge or the other side asks why an affidavit was resubmitted, be truthful. Honesty is always the best policy.

Consult with an Experienced Family Law Attorney in Central Maryland

Sandra Guzman-Salvado has years of experience helping separated individuals fill out and file financial affidavits. Contact our office today for more information on reporting your finances during a divorce and all other family law-related matters.

[1] Mroz, Kelly, “What Happens When You Lie on Your Divorce Financial Affidavit?” LegalZoom.
[2] Md. Code, Com. Law § 9-101.
[3] O’Neill, Ann, “Ex-Wife Loses Big in This Game of Chance,” LA Times.
[4] Landers, Jeff, “What Are the Consequences of Hiding Assets During Divorce?” Forbes.com.