Often referred to as a Financial Affidavit, a lifestyle analysis is a review of assets, liabilities, income, and expenses to determine a standard of living for a divorcing couple in Arizona. Based on this analysis, division of assets and spousal support will be decided.
Why is a lifestyle analysis important?
Lifestyle analysis is important to understanding the standard of living to which the individual and couple have grown accustomed to determine how much, if any, spousal support needs to be awarded and how assets will be divided. This tends to be fairly straightforward in cases where one or both spouses have W-2 jobs and limited sources of additional income. They may, for example, own their primary residence and rental properties but they are not running a business in addition to their 9-5 job.
In Arizona divorce cases where one or both spouses own their own business, the income and expenses will come under greater scrutiny. Expenses that would otherwise be counted as personal, may be run through as business expenses making the income received by the business owner less. A closer look may be taken at the business and personal income and expenses to determine the real standard of living.
A lifestyle analysis includes financial information from the last few years of the marriage including:
• Bank and investment account statements
• Retirement account statements
• Credit card, car, and other loan statements
• Personal and business income tax returns
• Credit reports
• Monthly recurring expenses (food, gas, rent or mortgage, utilities, groceries, entertainment, travel)
A comprehensive review of daily spending habits is bound to reveal a few surprises. In some cases secret credit cards or bank account accounts are revealed. In the more complex, there may be offshore accounts, and in the most shocking there may even be an affair or child revealed.
Having an attorney on your side who can help you sort through the lifestyle analysis and rest of the divorce process will help lessen the stress of an already stressful situation. Make an appointment with Stuart & Blackwell today to learn more about our services and resources for divorcing couples.