Financial Statements can be intimidating. For most people, this is the first time they have to swear an affidavit. The key thing to remember is to be honest. If you do not know the answer to a question, say so.
They other thing to remember is that a Financial Statement is a snap shot of your personal financial circumstances. You may be asked to estimate an expense. If you make an honest mistake, then it will not be held against you. However, if you underreport income or exaggerate expenses, you will run into serious trouble.
For example, if you have an income of $50,000 and you show expenses of $70,000, you will have a hard time showing how you make ends meet. If you show a corresponding increase in borrowing, that would be a reasonable explanation.
Some people have high expenses and rely on family support, but are embarrassed to include those gifts. If they are loans, you should include them in the debt section of the Financial Statement.
Income errors on financial statements are likely to get you into the most trouble. Generally, you should look at the average of your last three years’ income and compare it to your estimate for the current year. If your estimate is 5 or more percent lower, you will need to provide an explanation.
Some explanations are acceptable. These include circumstances where your employer reduced your work hours, you reduced your work hours to look after your kids, or a change in employment. A court will impute income to you if they believe that your estimate is too low. This is not a good position to be in, as they can impute at a level in excess of your actual income.
It is also important to remember all of the required attachments. Click here to review a list of important attachments (items 1-9).
Some people who file on-line do not retain their T2 Tax Returns. These are the documents you submit to the Canadian Revenue Agency (CRA). If you do not have copies, you will need to recreate the forms you submitted to CRA. Just remember that these documents must be accurate.
I started this article stating that Financial Statements can be intimidating. The best thing to do is to get help. If you are not using a lawyer, consider hiring a lawyer for an hour to help you prepare your statement. You can also look for free services in your community. Try contacting your local courthouse to see if they have Family Duty Counsel to help you.
Click here for a link to the Provincial Court Family Financial Statement.
Click here for a link to the BC Supreme Court Family Financial Statement.
Collaborative Lawyer and Mediator
Arbitrator and Parental Co-ordinator
Michael Butterfield is the Principal Lawyer and Mediator with Butterfield Law, and can assist with negotiations, mediations, writing separation agreements, and providing independent legal advice on existing or proposed agreements. He is located in Victoria, B.C.