New Jersey Divorce Advisors LLC Offers Divorce Clients Guidance on Creating a Case Information Statement

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Bryan Koslow, MBA, CFP®, CDFA™ & Jodi Carter, CPA

Many parties and even some attorneys fail to appreciate the importance of preparing an accurate CIS.

Red Bank, NJ (PRWEB) June 13, 2012

New Jersey Divorce Advisors, LLC, the leading divorce financial experts in New Jersey, have released their recommendations for completing a Case Information Statement(“CIS”) during the divorce process.

A recent high-profile divorce case proves the point that one of the most important preparations a person must make before going to court is making sure the Case Information Statement is thorough and complete.

Luckily for Laura Blank, her original CIS paperwork (in New York State the CIS is called a Statement of Net Worth) in her divorce from Steven Simkin in 2006 was thorough and complete; it worked in her favor when Simkin brought her back to court to try to renegotiate the settlement agreement. According to the New York Times, when the two divorced, Blank and Simkin split their millions evenly. Blank took hers in the form of cash. That meant that her portion of the investment proceeds was liquidated. Unfortunately for Simkin, he chose to keep his portion of the assets invested with Bernie Madoff. When Madoff was arrested for fraud in 2008, Simkin lost everything he had invested with him. Simkin sued his ex-wife to try to alter the terms of their divorce agreement, but a New York judge ruled that the divorce settlement was based on the value of the asset at the time of the settlement, and as such given that the asset was an investment, there’s an implicit understanding that it may change over time. Had there been an error in the value shown in the CIS at the time of the settlement, the case could have been reopened (Simkin v. Blank, Index 48, NYLJ 1202547876121, at *1 Ct. of App., Decided April 3, 2012) .

The CIS is the most critical document in terms of the financial settlement, and indeed every case in the state of New Jersey requires the completion of a CIS, but what exactly is it?

“Simply put it is a Financial Affidavit created by each spouse,” says Jodi Carter, co-founder of New Jersey Divorce Advisors LLC, and a Certified Public Accountant (CPA). “The CIS contains a comprehensive list of all assets, liabilities, income, and expenses for both parties. It contains all relevant case information including date of the marriage, issues in dispute, children’s names, and the date of separation. And it breaks down the household income, taking into account bonuses and commission versus wages, and self-employment income, as well as appropriate tax deductions, analyzing required versus voluntary deductions such as 401(k) contributions.”

In addition, the CIS requires each spouse to set forth a budget as to the standard of living acquired during the marriage and expected after the marriage. This is why this form is the most important document in the divorce, it allows each party to track the money that was spent during the marriage, and also prepares each person for life after divorce. The form includes all of each person’s assets and liabilities, not only those that are subject to equitable distribution, and requires the submitting spouse to sign off on the accuracy and validity of the information contained in the document.

“Many parties and even some attorneys fail to appreciate the importance of preparing an accurate CIS. Success in negotiations, mediation, collaborative divorce, pendente lite motions, and trial depends on the accuracy of historic budgets, projected budgets, current income, and financial net worth,” says Hanan M. Isaacs, Esq., a Certified Matrimonial Specialist, mediator, and collaborative attorney located in Kingston, NJ.

In divorce litigation, the attorneys will rely on the information provided in the CIS to present their cases and negotiate an equitable settlement for their clients. The judge will also rely on the data provided in the CIS to assess the marital lifestyle and rule on alimony, child support, and distribution of assets. In mediation & Collaborative divorce, the CIS is not mandatory but is typically used because it is beneficial to the parties to work from this document. In less adversarial situations, the parties may create a joint CIS to be used by both parties.

“For many clients, the CIS represents the first time they’ve compiled a household budget or household balance sheet,” says Bryan Koslow, co-founder of New Jersey Divorce Advisors LLC, and a Certified Divorce Financial Analyst (CDFA™). “It forces people to compare their household inflows vs. outflows. At New Jersey Divorce Advisors LLC, we take it a step further by creating separate budgets for our clients for post-divorce to give them a framework for making decisions. For example, the budget will drive decisions about whether you can stay in the marital home, and how many hours you may need to work to support your desired lifestyle. The CIS is also the basis for determining how disruptive the divorce will be to college savings plans, retirement plans, and estate plans.”

Hiring a financial expert to create a lifestyle analysis takes the CIS preparation to the next level. The financial professional will meticulously examine tax returns, bank account statements, brokerage account statements, credit card statements, credit reports and other financial documents provided by the client to create an accurate account of the couple’s standard of living for the court. The lifestyle analysis will demonstrate the couple’s day-to-day expenses, and the spending habits of each party. This can help the court more clearly understand the couple’s finances, which is critical because one of the factors that the court considers when determining alimony is the standard of living to which each party was accustomed during the marriage.

Too often couples see the CIS as another required document for the divorce. By viewing this document as the basis for decisions and a wealth of information for planning for their future, it becomes a pivotal tool in moving from one stage of life to the next.

About NJDA
New Jersey Divorce Advisors, LLC is a financial consulting and planning firm specializing in the financial aspects of divorce. By analyzing the unique situation of each client, the firm structures equitable settlements and creates a plan for the client’s future. The firm, founded by a Certified Public Accountant and Certified Financial Planner™, provides clients a comprehensive financial assessment that includes tax analysis, financial planning, retirement and estate planning, and insurance recommendations. The firm may be utilized in Divorce Mediation, Litigation, or Collaborative Divorce.

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