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CSI: New Jersey Divorce

Unraveling a family’s marital finances in a divorce can be daunting task.  In all contested New Jersey divorce actions where there is any issue as to custody, support, alimony or equitable distribution, both parties magnifying glassare required to file with the court and serve on the other party a form known as a Case Information Statement, commonly referred to as a “CIS”.  However many mistakenly refer to this form as a “CSI”– such is the power of television and pop culture in our society. In doing so, they don’t realize how prophetic they are.  In fact, for an experienced matrimonial attorney the opposing party’s CIS can be analogous to a crime scene, ripe with clues and serving as a powerful tool to investigate and uncover the truth about a family’s finances.

Besides requesting general background information of the parties, their children, employers and the like, a Case Information Statement requires the parties to supply detailed information with regard to all aspects of the family’s finances.  It requests information regarding income, whether earned or unearned from all sources including for the past year, the current year-to-date and recurring.  It requests a detailed budget of monthly expenses broken into various categories of shelter, transportation and personal expenses, whether reflective of the marital lifestyle or as currently existing.  It also requests a detailed statement of assets and liabilities. A CIS is to be accompanied by various supportive documents, including recent tax returns, pay stubs, income records and benefit statements. For many, the CIS form can be intimidating and perplexing and its completion arduous and burdensome.  In many respects, it is.  However, working together with their attorney, a parties’ preparing of a CIS which is as complete and accurate as possible is worthy of this substantial investment of time and effort.  It often serves as the bedrock upon which a matrimonial matter is settled. It is also given great weight by the court in determining those disputed issues it is asked to resolve.

On the other hand, a poorly drafted, incomplete or inaccurate CIS, whether as a consequence of a lack of time or effort put into it, a failure to take seriously, or an intentional design to mislead or obfuscate the truth will impede a prompt and effective resolution of the case, serve as fodder upon which to destroy that parties’ credibility with the court, and be used by the other side as a tool to unravel the mystery surrounding the marital finances.

One of the most prevalent scenarios is where the alleged expenses listed in the CIS far exceed the claimed income.  Sometimes this can be explained as the parties living beyond their means and are incurring debt or exhausting assets to maintain that lifestyle.  However, where the CIS shows little or no debt or evidence of asset dissipation and the family’s income is easily verified with W-2’s, paystubs, etc. it is likely that the alleged expenses may have been artificially inflated in an attempt to suggest an enhanced lifestyle to bolster a claim of alimony or support. Frequently CIS’s are prepared before formal “discovery” is undertaken.  This discovery process often involves the disclosure and exchange of financial documents such as bank account records and credit card records which can then be analyzed to verify what the expenses actually are, and if dramatically different, can be an area ripe to attack the proponent’s credibility.  To avoid this, it is crucial for a party to review their financial records in preparing their CIS budget so that the claimed expenses can be supported and substantiated.  What if in that scenario the claimed expenses prove to be accurate? This may be a powerful clue that the claimed income has been underreported.  This is often a point of concern where one or both parties are self-employed, are a partner or co-owner of a small business, or are employed in a “cash” business. A more thorough investigation of that person’s true income, including an evaluation of the businesses’ finances, is clearly called for, often with the assistance of an accounting expert.  What is uncovered may implicate tax or other legal concerns, which often serves as a motivator to resolve the financial issues before they are presented to the court for disposition.

The income reported in the CIS may be inconsistent with that reflected in the parties’ tax returns or other income documents.  These inconsistencies may form clues that other forms or sources of income may exist, whether “cash”, or in the nature of phantom or passive income, deferred compensation, loans or capital distributions and other types of perks or benefits.

The expenses reported on the CIS may, in some cases, be far less than the income claimed.  Assuming that this cannot be explained merely by the fact that the family lived frugally, it may be reflective of a parties’ attempt to suggest that the marital lifestyle less than it actually was in hopes of minimizing a claim of support.  As with an effort to enhance one’s expenses, artificially deflating one’s expenses can be refuted by objective evidence of lifestyle, including an analysis of bank and credit card records. What if in that situation the claimed expenses are accurate, yet there does not appear to be any corresponding increase in savings or asset acquisition to explain where the money went.  This may warrant an investigation as to whether funds or assets have been secreted or hidden, or monies dissipated or spent for non-marital purposes such as gambling, drugs, or an extra marital relationship.  Similarly, the existence of excessive, unusual, out-of-place or unexplainable expenses or debts in a CIS may be a clue that further investigation is warranted.

Bank and/or investment accounts listed in the CIS may be inconsistent with those identified in the parties’ tax returns or the level of interest/dividend income reported therein. This may be a clue that other accounts exist which have not been disclosed or may reflect a recent dissipation of assets or accounts which warrant further investigation.

When one receives the other parties’ CIS, it should never simply be put aside or its contents accepted at face value.  That party and his or her attorney must take time to analyze it and to look behind the numbers. Like fingerprints or DNA left at a crime scene, a poorly prepared and/or inaccurate CIS can provide the clues necessary to solve the mystery behind the marital finances.  Let the experienced attorneys of the law firm of James P. Yudes, PC help you to undertake the legal “CSI” in your divorce.