Regardless of the causes, each divorce takes a significant emotional toll on everyone involved. Spouses, children, and other family members go through turbulent times during the divorce procedure. Children are especially vulnerable. Stress, anxiety, and the fear of the unknown affect their emotional well-being detrimentally. The experience can leave everyone with a bitter taste in their mouths for years.
Unfortunately, divorces do not end with emotional challenges. Equally burdensome is dealing with financial issues such as marital property division, child support, and alimony. Things get even more complicated in high-net-worth divorces.
Therefore, financial transparency proves critical in resolving complex issues revolving around money. This article will offer insights into the Illinois financial affidavits, explaining their purpose and vital elements. Next, we will discuss the importance of these statements in litigation while exploring their role in collaborative divorce. Read on to learn more!
Illinois Financial Affidavits in a Nutshell
Divorce inevitably revolves around financial issues. Dividing marital property and determining the amount of spousal and child support are essential aspects of the process. Aiming to achieve complete financial transparency, the Illinois Supreme Court approved the Financial Affidavit form, requiring spouses to disclose accurate financial information.
The Affidavit – a formal statement – consists of four categories of information (in order of importance):
- General Information
This part of the Financial Affidavit (sections 1 through 5) contains questions about identity and contact information (for spouses and other household members), date of birth for both spouses and date of marriage. In addition to providing general information about the petitioner and respondent for financial disclosure purposes, these sections help the court complete other documents during the divorce.
- Assets and Debts
Providing the court with accurate information regarding the spouses’ assets and debts is vital, even in uncontested divorces. Despite the parties agreeing on all terms, the court must ensure that the settlement is not unreasonable. That means that the agreement must reflect the genuine consensus and represent an approximately equal transaction between the parties – no side can gain a disproportional advantage over the other. Sections 14 through 16 deal with debts and assets. Each party must provide details about the creditor and describe the nature of the debt and its amount, including monthly payments. In the assets section, the parties must offer information about cash and cash equivalents (with the name of the bank, account type, and balance), certificates of deposit, prepaid debit cards, investment accounts and securities, brokerage accounts, real estate, motor vehicles, business interests, life insurance policies, retirement benefits, valuable collections, and other personal property valued over $500.
The income part of the Illinois Financial Affidavit (sections 6 through 9) deals with questions regarding employment (employer name and address, number of paychecks per year, and gross income), self-employment or other business income, gross income from all sources (for example, overtime, commissions, tips, pension, dividend income, social security disability, military allowances, rental, royalty, and investment income, gifts, etc.). Clear insights into parties’ income allow the court to decide on maintenance and child support.
Sections 12 and 13 of the Affidavit contain questions about expenses. That includes monthly living expenses (household expenses, mortgage, rent, gas, telephone, electricity, internet, cable or satellite TV, garbage removal, water, laundry, pet care, groceries, household supplies, etc.), transportation expenses (car payments, gasoline, parking, etc.), personal expenses (medical care, clothing, entertainment, newspapers and magazines vacations, gym membership, etc.), and health insurance. The expenses sections are the most controversial because parties are often unclear about whether to include the family’s past expenses (before separation) or choose a future-focused approach (estimating their expenses after divorce). The right family attorney can help you make the right decision and avoid perjury due to misstating the expense information.
Financial Affidavits in Litigation: A Tool or a Weapon?
Financial affidavits are legal instruments enabling full disclosure of the parties’ assets, income, debts, and expenses. Financial sworn statements in Illinois are an irreplaceable tool for achieving financial transparency. However, because the court imposes severe sanctions against the party who fails to disclose financial information (or misstate it), financial affidavits can sometimes represent a powerful weapon against the non-complying party.
According to the Illinois Marriage and Dissolution of Marriage Act (IMDMA), the party requesting child support or maintenance must provide a Financial Affidavit disclosing their financial situation. In addition to a child or spousal support, each party can submit a request for a Financial Affidavit during the discovery procedure, coercing the other side to provide detailed financial information. The court can also request the parties to provide complete financial affidavits.
Section 501(a)(1) of the IMDMA mandates that parties support the financial statement with relevant documentation, such as tax returns, banking statements, pay stubs, etc.
Unlike most aspects of divorce litigation, financial affidavits are excluded from the public record, meaning that your private financial information will remain confidential.
Intentionally or recklessly filing inaccurate or misleading information in financial statements can result in significant penalties and sanctions, including costs and attorney’s fees. The form cautions parties about this on its first page. Likewise, Section 735 ILCS 5/1-109 of the Illinois Code of Civil Procedure requires parties to certify that everything in the Financial Affidavit is true and correct, acknowledging that making false statements is perjury resulting in penalties.
In conclusion, filling out financial affidavits requires honesty and diligence. To avoid potential legal consequences of filing inaccurate financial statements, seek help from an experienced Illinois attorney or financial adviser.
Collaborative Law: Are Financial Affidavits Necessary?
Unlike litigation, there is no formal discovery in collaborative divorce. Conducting in good faith is a cornerstone of the collaborative law process. In other words, the collaborative law method does not dispose of coercive mechanisms like litigation. But the absence of such compelling instruments is not a flaw of the collaborative process – on the contrary, it is its competitive advantage.
The non-adversarial and voluntary nature of collaborative divorce defies the use of any form of coercion. As a voluntary and mutual good-faith effort, collaborative law encourages open and informal communication. Disclosing financial information and other material facts is part of casual interactions between the parties and their respective attorneys, who work shoulder-to-shoulder to achieve mutually beneficial outcomes. Collaborative attorneys consult with their clients and each other, deciding what information to share. Contrary to the court process, where findings of facts (including financial information) become part of the divorce judgment, collaborative lawyers tailor the scope of financial disclosure in the settlement to fit each party’s interests.
Nevertheless, collaborative attorneys can exchange financial affidavits, disclosing their clients’ financial situation. But instead of using it as a destructive weapon against non-complying parties, financial statements in collaborative law represent practical tools for maximizing negotiation results. The affidavit form, approved by the Illinois Supreme Court, helps parties in collaborative divorce make more detailed financial disclosures, contributing to overall transparency.
- Financial transparency is a foundation of every successful divorce, including out-of-court procedures;
- The Supreme Court of Illinois approved the Financial Affidavit form, mandating specific financial disclosures in family and divorce cases;
- The Illinois Financial Affidavit form consists of four categories (general information, assets and debts, income, and expenses), each requiring detailed financial disclosures and helping the court render fair and just alimony, maintenance, and property division decisions;
- Divorce litigation is financial affidavits’ natural surroundings. Each party can request submitting accurate financial statements from the opposite sides, and failing to do so can result in penalties and sanctions for perjury;
- Collaborative law rests upon good-faith efforts and voluntary exchange of information. As such, collaborative lawyers focus on informal meetings where parties disclose material facts, including financial details. However, collaborative lawyers can use financial affidavits as a practical tool for maximizing the effectiveness of negotiations.
Achieving Financial Transparency with a Top-Tier Northbrook, IL, Collaborative Attorney
Are you confused about what information to include in the Financial Affidavit divorce form? Do you fear potential legal consequences of providing inaccurate or misleading information? Do you and your spouse prefer non-adversarial processes rather than vindictive divorce litigation?
If you nodded to each question, you came to the right place. Anna P. Krolikowska is a top-notch Northbrook family lawyer, litigator, mediator, and collaborative attorney with invaluable experience.
As an experienced litigator, Anna recognizes the pain and emotional suffering many couples experience during divorce. She will invest utmost efforts in helping you achieve complete financial transparency and thus relieve you from additional stress and worries about potential sanctions for failing to do so.
As an esteemed member of the Collaborative Law Institute of Illinois, she provides her clients with supportive, sensible, considerate, constructive, and meaningful solutions. Using the knowledge gained through years-long learning and hard work, Anna P. Krolikowska will guide you through the collaborative process, cooperating closely with her counterpart and financial experts. Through private negotiations, voluntary financial disclosures, and respectful communication, Anna will assist spouses in achieving a fair divorce settlement that suits their specific situations.