by Todd W. Stevens, Esquire
Financial Affidavits in New Hampshire Divorce and Parenting Cases – Introduction
In all New Hampshire divorces and New Hampshire parenting actions, the parties are required by New Hampshire Circuit Court Family Division Rule 1.25-A to file a Financial Affidavit with the New Hampshire Family Division Court. Per New Hampshire Circuit Court Family Division Rule 2.16, both parties are also required to file a NH Financial Affidavit with the Court prior to any hearing involving financial issues.
“Recognize that the New Hampshire Financial Affidavit is a crucial document in your New Hampshire divorce or parenting action. As such, devote the amount of time necessary to completely and accurately fill it out. “
The NH Financial Affidavit is a form provided by the New Hampshire Family Division Court in NH Divorce and NH Parenting actions that requires you to list your monthly income, monthly expenses, assets, debts, health insurance, life insurance, retirement accounts, and other financial information. At the end of the New Hampshire Financial Affidavit, you take an oath before a New Hampshire notary pubic or justice of the peace that the information contained in your NH Financial Affidavit is true and correct to the best of your information and belief. You then sign the NH Financial Affidavit, attached your last pay-stub, exchange it with the other side in your case, and file it with the New Hampshire Family Division Court, typically right before a hearing involving financial issues.
That’s when many people run into issues. Why? Because either or both of the parties did not: 1. understand the importance of the NH Financial Affidavit; and 2. take the time to fill out the NH Financial Affidavit completely and accurately. The result is predictable – the New Hampshire Family Division Court, the other party, or his/her lawyer, quickly spot errors and discrepancies that frankly make you look like you’re hiding income, property or both. Omitting income or property is a big deal because the New Hampshire Family Division Court uses the parties’ Financial Affidavits to calculate child support, alimony and divide marital assets, on either a temporary or permanent basis. It’s also very, very damaging to you because, no matter how inadvertent the omission was, you look like you were caught in a lie, under oath no less. Not good.
Three common mistakes parties to NH divorces and New Hampshire parenting actions make on New Hampshire Financial Affidavits are listed and described below.
Monthly Income is Understated or Omitted on NH Financial Affidavit
Monthly income on a NH Financial Affidavit can be understated or miscalculated in a variety of ways.
Incorrectly calculating monthly income from bi-weekly or weekly paystubs
First, the NH Financial Affidavit asks for monthly income before taxes (gross income), not after taxes (net income). The monthly income amount for the purposes of the NH Financial Affidavit is derived from a specific formula depending on how frequently you are paid. If you are paid bi-weekly, you multiply your bi-weekly wage by 2.17, not 2, to arrive at your monthly wage. If you are paid weekly, you multiply your weekly wage by 4.33, not 4, to arrive at your monthly wage. Multiplying by 2.17 or 4.33 is a recognition of the fact that some months have fractionally more than four weeks.
Failing to multiply your bi-weekly or weekly wage by the correct number is perhaps the most common mistake parties make on their NH Financial Affidavits. It understates your gross income for the purposes of New Hampshire child support and NH alimony. Invariably, either the NH Family Division Court or the other party/attorney catches the error. At best, you look careless; at worst, untruthful.
Omitting overtime pay from the NH Financial Affidavit
Another issue is omitting overtime pay. Many people fail to report overtime pay on their NH Financial Affidavit because they did not receive any during the month they filled out the Financial Affidavit. The problem is, the pay-stub they attached to their New Hampshire Financial Affidavit usually indicates how much overtime they have been paid to date. The NH Family Division Court, or the other party, frequently catches this mistake. The result is that overtime wages are averaged out over the number of months that have passed, and added to your gross income. If you do not account for, or explain, how often you receive overtime on y
our NH Financial Affidavit, you look like you are hiding income from the other party and the Court.
Omitting commissions from the NH Financial Affidavit
A third issue is omitting commissions from the NH Financial Affidavit. Like overtime, many people reason that they need only include actual commissions received during the month they filled out the NH Financial Affidavit. Not coincidentally, the lack of commissions for that month is usually atypical – a fact quickly figured out by the New Hampshire Family Division Court and the other party from the pay-stub. Moreover, the other party usually has a pretty good grasp on what is made in commissions, so attempts at omitting this information actually invites more scrutiny.
Finally, there is the issue of a party not disclosing income s/he received “under the table.” This usually occurs where one party is self-employed or in a service industry where payment is frequently made with cash. Many, many people receive income under the table. They are rightfully very reluctant to disclose it on a NH Financial Affidavit for fear of being audited, or worse, by the Internal Revenue Service or State of New Hampshire. The problem, however, is that these “under the table payments” are no secret to the other party. They are often fully aware of this practice and ready to explain it to the NH Family Division Court. Don’t compound the mistake of receiving income “under the table” by omitting it on your sworn financial affidavit.
Asset Value is Understated or Omitted from New Hampshire Financial Affidavit
The New Hampshire Financial Affidavit requires that you disclose all assets that have a substantial value. The instructions that are attached to the NH Financial Affidavit explain what assets you should list. Despite these instructions, many litigants take it upon themselves to decide which assets to disclose on a NH Financial Affidavit. Whether they do so to hide these assets from the NH Family Division Court, or because they are simply confused, depends on the case. But it is worthwhile to debunk some common myths that I see as a New Hampshire divorce attorney time and time again. Generally speaking, the following assets are marital property and must be disclosed on your New Hampshire Financial Affidavit.
- personal property or real estate you received prior to, or during, the marriage
- gifts or inheritances you received prior to, or during, the marriage
- investments, stocks, bank accounts, retirement accounts, etc. titled only in your name
- business interests (partnerships, LLC’s, closely-held corporations, etc.) in only your name
- real estate you own jointly with other members of your family – brothers, sisters, etc.
The common denominator with all of these items? Your gut tells you the other party is not entitled to “your” property. Irrespective of your feelings, omitting them from your NH Financial Affidavit is almost always discovered and pointed out to the New Hampshire Family Division Court, severely damaging your credibility. Worse yet, if the asset isn’t discovered until long after the divorce, the Court can award the entire asset to the other party.
Monthly Expenses are Greater Than Monthly Income
The NH Financial Affidavit devotes a full page to categorizing and calculating your monthly expenses. Total monthly expenses are listed on the bottom right of the page. Total onthly expenses can be quickly compared to monthly income on the first page of the Financial Affidavit.
Unless you are heavily relying on credit cards to get by, it is self evident that your monthly expenses cannot exceed your monthly income. Yet many people submit Financial Affidavits in which their monthly expenses greatly exceed their monthly income. For the Court, that begs an obvious question – what other sources of income does this person have in order to pay these expenses? Upon inquiry, the Court or the other party frequently learns that a family member is supplementing the person’s income, but this income is not disclosed. Other times, the source of income is not clear, but clearly exists. Under these circumstances, Courts sometimes substitute the expense totals for the income totals and calculate New Hampshire child support or NH alimony based on this number.
The takeaway? Disclose all sources of income you are receiving on your NH Financial Affidavit. Alternatively, check your expenses and make sure you are not overstating the amount you pay each month for a given item.
Financial Affidavits in New Hampshire Divorce and Parenting Cases – Conclusion
In conclusion, the pitfalls referenced in the preceding paragraphs of this blog post are easily avoidable. Recognize that the New Hampshire Financial Affidavit is a crucial document in your New Hampshire divorce or parenting action. As such, devote the amount of time necessary to completely and accurately fill it out. When in doubt, disclose the asset or income. Otherwise, you risk the Court, or the other party, pointing out your omission and drawing into question your honesty.
We are experienced and aggressive divorce lawyers in Portsmouth, NH and Dover, NH. We can help you avoid the pitfalls of incorrectly filling out a New Hampshire Financial Affidavit in your New Hampshire divorce or New Hampshire parenting action.