TEN TIPS FOR MORE EFFECTIVE RULE 8.05 FINANCIAL STATEMENTS

If your case involves economic issues or property division, Rule 8.05 of the Uniform Chancery Court Rules requires that you provide a financial statement complying with the form published in the rules. 

An effective financial statement can make or break your case.  It is the template for your client’s testimony, and a poorly-prepared statement will make your client cannon fodder for cross examination, while a well-prepared one will inoculate him or her from serious damage.  Most importantly, the financial statement is what the judge will spend the most time mulling over when fashioning an opinion.  The more effective your statement, the better off your case will be. 

Here are ten ways you can make your Rule 8.05 statements more effective:

1. Never present a financial statement that you have not gone over in detail with your client.  As part of your trial preparation, question the client’s figures, test his or her mastery of the information on it.  If your experience tells you that a figure is unreasonably high or low, question it and make the client defend it.  If the client can not defend the number, suggest that the client reconsider it.  And while you’re at it, make sure that your client knows what he or she included in every category.  Are there duplications?  For instance, if your client charges clothing for the children on her MasterCard, did she duplicate the amount paid on the card in the line for clothing?  Don’t just take your client’s figures at face value; inquire about them.  I once asked a woman on the witness stand how she came up with $480 a month for entertainment, and she explained that was the amount she had spent the month before for flowers for her aunt’s funeral, and that her sisters were going to reimburse her.  When I asked what she usually spent on entertainment, she said $50.  In one fell swoop, I lopped $430 a month off of her expenses, diminishing her alimony claim against my client.  Her attorney had simply taken her word for the $480 expenditure without questioning behind it.      
2. Always have the statement typed so that it clearly presents your client’s position.  A handwritten statement with scratched-out figures and marks, notations and arithmetic that doesn’t add up will just add confusion and make the judge’s job disagreeably more difficult.  Take the time to type the figures in their proper places and make sure they add up properly.  Remember the old adage:  “The easier you make the judge’s job, the more likely it is you will prevail.”  Okay, that’s probably not really an old adage, but it should be.  
3. Make sure the tax returns are attached.  Copies of the preceding year’s state and federal income tax returns “in full form as filed” are required.  This means that all schedules and w-2’s must be attached.  If a document was sent with the original return to the IRS, a copy of it must be included.
4. Have an adequate number of copies.  “When offered in a trial or a conference, the party offering the disclosure statement shall provide a copy of the disclosure statement to the Court, the witness and opposing counsel.”  This means that, in addition to the original in evidence, you should have three additional copies, plus one for yourself.  It does your client absolutely no good for the court not to have a copy to look at while your client is being examined about it.  It would even be a good idea to provide an extra copy for the judge to mark up with his or her own notes during testimony.
5. Include a complete employment history.  Some lawyers have deleted this from the form in their computers, for some reason, but it is specifically required in the rule:  “A general statement of the providing party describing employment history and earnings from the inception of the marriage or from the date of the divorce, whichever is applicable.”  This information is vitally important in connection with property division, alimony, child support and even child custody, and yet it is often omitted by lawyers.
6. Be sure to explain any discrepancies.  If your client has a perfectly logical explanation why the cell phone bill is $375 a month, be sure to cover it.  If expenses exceed income, how is the client managing to pay the difference?  If your client’s year-to-date income includes a one-time bonus that will never be repeated, notate that and have your client testify about it; if you don’t explain it, you can expect that the judge will include the bonus in your client’s income.
7. Use an up-to-date statement.  A financial statement prepared six months ago in discovery and not updated since is simply not a statement of “actual income and expenses and assets and liabilities,” as required in the rule.  It defeats the purpose of the rule for a witness to spend a couple of hours explaining how the statement should be updated when that should have been done in trial preparation.  If you come to court without an updated statement, the court may continue your trial to require you to prepare one.
8. Have your client sign and date the statement.  The Court of Appeals has been critical of unsigned financial statements. 
9. Make sure the entries really are what they say.  A voluntary 401(k) contribution is not “mandatory retirement,” and should not be listed on that line.  Nor is a private health insurance premium “mandatory insurance.”  The term “mandatory” as used on the form refers to items required by law, such as PERS retirement. 
10. Remember that a month has more than four weeks.  A month is 52 weeks divided by 12, or 4.3.  A client who says “I get paid $400 every Friday, so I make $1,600 a month” is wrong; the correct amount would be $1,720.