Partner
During a divorce, the courts work hard to ensure that each spouse enjoys a post-divorce standard of living comparable to the standard of living during the marriage. To do this, judges need hard evidence of each spouse’s lifestyle.
Although the Statement of Net Worth and other financial records are helpful, they do not present as full of a picture of a spouse’s lifestyle as a lifestyle analysis.
Importance of a Lifestyle Analysis
Beyond looking at each party’s income, which is the basis for calculating the amount of spousal maintenance, one of the principal documents the courts use to determine spousal support (and other important divorce matters) is the Statement of Net Worth. This document is a complete listing of a spouse’s financial liabilities and assets, from credit card and other debt to investment accounts.
Judges use the Statement of Net Worth to gain a picture of a spouse’s standard of living. However, the document provides only a simple line-item accounting of debts and liabilities.
A lifestyle analysis, on the other hand, gives a more complete picture of just how a spouse lived during the marriage. It adds color, if you will, to the Statement of Net Worth and provides judges with a more complete picture of the financial side of the marriage during spousal support determinations.
Contents of a Lifestyle Analysis
Typically, a lifestyle analysis will include details that fill in the blanks found in the Statement of Net Worth, such as:
- A breakdown of the recent day-to-day living expenses during the marriage
- A breakdown of each spouse’s recent spending habits
- A clear accounting of how money was spent
- A detailed projection of each spouse’s future expenses, which might include new expenses like health insurance or mortgage/rent payments
To complete a lifestyle analysis, a financial professional must have access to the same documents and records used to complete the Statement of Net Worth. These include:
- Federal and state tax returns, including income and business tax returns
- Pay stubs
- Financial account balances
- Credit card statements
- Mortgage and loan documents
- Utility bills
- Expenses not found in statements or accounts
- Personal expenses paid through a business, if applicable
Essentially, any financial or other document that helps paint a fuller picture of the couple’s standard of living will be analyzed.
The guidance a lifestyle analysis provides a judge is invaluable. Judges base their various divorce judgments, from spousal support to child support, on these reports. Spouses have a real opportunity to secure their future financial health by having their attorney draw up a detailed lifestyle analysis.
Who performs the lifestyle analysis?
Your divorce attorney will commission the services of a forensic accountant experienced in divorces. With your attorney, the accountant will systematically track every penny spent throughout the marriage and account for every asset and liability.
Fraud and Hidden Assets
Although unlawful, fraud and the hiding of assets are both serious problems in divorces. Statements of Net Worth are only somewhat effective at preventing hidden assets and fraud. However, a lifestyle analysis can detect patterns and irregularities that indicate the existence of hidden assets and fraudulent activity.
For example, forensic accounting can uncover the existence of storage units paid for with cash, trusts, properties held in another’s name, and more.
It’s Worth the Time
A lifestyle analysis is yet another important step in spousal support proceedings. Although having one done can be time-consuming, doing so is worth it, given the opportunity it provides to influence a judge’s decision regarding spousal support and other important matters.
Aiello & DiFalco: Family Law Attorneys Ready to Fight for You
Spousal support issues can lead to life-changing rulings from the court. You need an experienced and caring professional to aggressively protect your interests. With years of experience and satisfied Garden City, NY clients, Aiello & Falco is the optimal choice. Call for a consultation today.