In family law cases, attorneys often ask simple questions which cause people consternation. Developing a budget is one such topic. People tend to want to avoid creating budgets, and it can become a difficult but necessary task to accomplish when people decide to divorce.
For most of our adult lives, we’ve heard about the merits and value of budgeting. It gives you an idea of where your money goes. It gives you an idea of how much credit you can take on without landing in serious debt problems. It can also set a good example for your children on how to manage money. Having a budget enables a person to live and support a lifestyle within their available means. However, not everyone is that disciplined. Likewise, when two people marry, finances are typically combined allowing them to create a new budget that may provide a better standard of living than what was enjoyed prior to the marriage. However, many married couples do not have – let alone live within – a budget. And, not having a budget is what often causes the psychological stress attorneys witness from clients when asked to prepare one.
In certain Oklahoma counties, budgets are mandated in every family law case. For example, in Tulsa and Pawnee counties, which comprise the 14th Judicial District of Oklahoma, local rule DR5 requires “an accurate and provable list of monthly living expenses” and “an accurate and provable list of all marital debts, stating the purpose of the debt and the amount of monthly payments for all existing debts and obligations”, and “an accurate and provable list of monthly living expenses”. Even without a specific local rule, budgets are necessary to meaningfully explain to the Court what you want financially and why. It cannot be emphasized enough: for a Judge, a budget is one of the easiest ways to determine your creditability. It must be accurate, and it must be provable. So, what should you do?
The first step is to know your numbers. An easy way to begin is to order your free credit report through www.AnnualCreditReport.com or a company website like www.CreditKarma.com. Start understanding where you are financially today by gathering your tax returns and financial statements on all assets you own and debts you owe. Organizing as much of the financial records that you have access to before you spend time with your family law attorney will save you billable hours.
Another step is to begin tracking your expenses. Check online payment systems (PayPal, Venmo, etc.), your checkbook, credit card statements, cash receipts, etc. Your attorney will help you complete this, so getting the most accurate information is important. Most family law attorneys have sample budget forms they can provide to accomplish this task.
Expect to make more than one budget or Financial Affidavit. You may need to create a budget reflecting income and expenses today, and a second budget showing anticipated expenses within the next 90 days, etc. Finally, establishing a post-divorce budget may be required – again to explain to the Court what you financially want and why. A budget should reflect the fundamental costs of living expenses (fixed and estimated) for items such as gas, food and housing. When these items are provided for, savings can be designated for bigger ticket items such as college, retirement or vacation. In addition, it’s a good idea to plan for expenses that may be incurred in the divorce process. Your attorney will help you complete this task so it’s important to give accurate information. If you don’t have access, don’t worry – let your attorney know what you are missing, and he/she can get it.
Divorce in Oklahoma is seldom undertaken lightly, and the financial implications can be complicated. The task of creating accurate and provable budget(s) should be taken seriously. The experienced family law attorneys at Doerner, Saunders, Daniel & Anderson, LLP provide consulting on budget development and can assist you in collecting information, providing clarity around the financial issues involved in a divorce proceeding.
Doerner, Saunders, Daniel & Anderson, LLP provides this content for informational purposes only. It is not intended to provide legal or other professional advice nor does the transmission of this information create an attorney-client relationship between any attorney of the Firm and the reader. If you seek legal advice or assistance, please consult with a competent attorney familiar with the applicable laws. If you wish to initiate possible representation by an attorney with this Firm, please call the attorney of your choice. You will be advised of our processes to avoid conflicts of interest and requirements of our letter of engagement before the commencement of representation.
