A Financial Information Statement is a court-required document for nearly all temporary orders hearings and final trials in Texas divorce cases. Here is a sample Financial Information Statement so you have an idea of what they look like. The names and details used are all fictional, although the facts used are relatively typical of the issues dealt with in a Texas divorce. The sample document is based on a husband who expects to move out of the residence and pay child support. In a real case both sides prepare and submit a Financial Information Statement to the court prior to a temporary orders hearing.
What is the Purpose of a Financial Information Statement in a Divorce?
Essentially this document shows to the court the gross and net income of each party as well as a list of the necessary expenses of the party preparing the Financial Information Statement. When I sit down with a client to prepare this document it is often the first time they have given much thought to what their resources are and what they will need post-separation. Obviously, the financial and cash flow issues in a divorce case are extremely important and need to be evaluated early on in the case.
The Financial Information Statement document is extremely important for helping the court (as well as your lawyer) evaluate the financial issues in the case. Assuming there are not large discrepancies between the numbers on each party’s Financial Information Statement, the decisions in a temporary orders hearing are largely decided by the evidence in each party’s Financial Information Statement.
What are the Pitfalls in Preparing Your Financial Information Statement?
In preparing the Financial Information Statement clients sometimes tend to underestimate their expenditures and give “low ball” expense numbers. Maybe this is because they are embarrassed and they give what they think the number should be, rather than what it actually is. It is important that you give accurate numbers in order to get the result you need. For example, if you typically spend $1000 per month for groceries based on your actual past history, then this is the number you should use for the Financial Information Statement. If instead you put $400 because that seems like a more reasonable number, you’re very likely to have financial trouble as the case progresses because you underestimated your actual expenses and don’t have enough coming in to cover everything. So try to be as accurate as possible in preparing your Financial Information Statement.
Of course the specifics of each individual case are unique and you should discuss with your attorney the preparation and use of the Financial Information Statement.
This video goes through the process of calculating child support in a typical Texas case. If you prefer, you can read the transcript below:
My name is Scott Morgan and I am a board certified Texas family law attorney. In this video I am going to walk through an example of a very simple child support calculation.
In Texas child support is calculated using a formula from the Texas Family Code. To calculate the child support amount you start with the payor’s monthly gross income. That amount is then reduced to allow for certain deductions, such as taxes and certain health insurance expenses. Once these deductions are made you have calculated the payor’s monthly “net resources.”
Note that this number is likely not the same as the payor’s actual take-home income. There are a lot of deductions that come out of someone’s paycheck, for example 401k contributions, that are not factored into the calculation of monthly net resources.
Once the monthly net resources are calculated, you multiply that amount by a percentage to arrive at the monthly child support amount. The percentage is determined by how many children there are, with a reduction in the percentage if the payor has other children he is legally responsible for.
As a simple example, lets take a payor who makes $96,000/year or $8,000/month. Assuming this payor is not self-employed (the net resources calculation is slightly different for the self-employed), we would look at the statutory deduction chart and see that the monthly net resource amount would be $5,920. If we further assume that the child support is for one child and the payor has no other children, then the statutory percentage would be 20%. We multiply the net resource amount ($5,920) by 20% to arrive at a monthly child support amount of $1,184.
This has been a very simple example and, as with everything in family law, there are certain exceptions that can apply, but this is how child support is calculated in the vast majority of cases in Texas.
I hope you found this video helpful. If you have any questions or suggestions for future videos please feel free to comment below.