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THE FAMILY CASE INFORMATION STATEMENT REVISITED

For the casual fan like myself, there are periods during the year where the sports landscape is rather barren. The time we are now in between the Super Bowl and March Madness is one such period. Similarly, there are periods where the family law landscape can seem rather barren as well, during which the courts’ issuing of decisions and/or the Legislature’s passing of laws seems to reduce to a trickle.  As we await for the inevitable legal faucet to turn back on, I thought that this might be a good opportunity to look back at some topics I had blogged about in the past. In my very first blog CSI: NEW JERSEY DIVORCE written in June, 2013, I discussed a form known as a Case Information Statement (or CIS for short) which parties are required to complete and file in all contested New Jersey divorce actions, and the ways in which this form can not only be considered the most crucial and important document in a divorce litigation, but how it can also serve as an invaluable and powerful tool to investigate and uncover the truth about the family’s finances.  Subsequent to my writing this blog, the Supreme Court approved changes to the CIS form, including the incorporation of detailed instructions, which addressed many of the very topics commented upon by me.  While the ego in me would like to think that my blog had something to do with the adoption of these changes, I will not be that presumptuous. However, I would like to highlight some of these changes at this juncture.

In my earlier blog, I noted that while the CIS form can be viewed by many as intimidating and perplexing and its completion arduous and burdensome, it is such an important document that it was worthy of a substantial investment of time and effort to insure that its preparation be as complete and accurate as possible. These sentiments have been recognized and mirrored in the new CIS instructions which expressly caution in bold print “It is extremely important that the Case Information Statement be as accurate as possible because you are required to certify that the contents of the form are true”.

Among the information requested in a CIS is 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, and which are expected to be relied upon by both the parties and the courts to establish lifestyle and/or need for alimony and child support purposes.  Highlighting the pitfalls that could ensue if the claimed expenses in a CIS were shown to be inaccurate, or inconsistent with income levels being reported, I noted in my previous blog that it was crucial for a party to review their financial records in preparing their CIS budget so that the claimed expenses could be supported and substantiated. These sentiments have now been memorialized in the new CIS instructions which direct “the monthly expenses must be reviewed and should be based on actual expenditures such as those from checkbook registers, bank statements or credit card statements from the past 24 months”. Clearly, this is a substantial point. I can’t tell you how many times we receive a draft CIS filled in by a client that include expense figures, particularly on the Schedule C Personal Expense column which seem out of whack – – whether too high, too low or without any entry whatsoever. When you ask the client about a given set of expenses and how they came up with those numbers, often they will respond that they were simply guesses. It is clear that they have made little or no effort to analyze their financial records in order to come up with more accurate or sustainable figures. For some litigants that may have been truly kept in the dark with regard to the family’s finances, or have had no access to the financial records, that response may be understandable. In those instances, rather than filing an inaccurate or incomplete CIS, or one replete with “guesses”, a better course would be to seek permission of the court, whether at the initial Case Management Conference or otherwise, to defer the filing of the CIS until “any other time designated by the court” per R. 5:5-2(b) until the requisite financial records are exchanged, or if circumstances warrant, an expert is retained to perform a lifestyle analysis. Only if none of those options are available should one consider submitting a CIS containing budgetary figures that are expressly designated as being “estimates” as the new instructions to the CIS form appear to authorize as long as they are “clearly noted”.

In my earlier blog, I also noted the importance of accurately identifying a party’s bank or investment accounts, particularly to avoid inconsistency with those which may be identified in a parties’ tax returns or the level of interest or dividend income reported therein. The new CIS changes also seem to address these concerns, not only instructing that asset values be taken, if possible, from “actual appraisals or account statements” but with the added requirement that the account’s institution and type be expressly identified in the CIS.

While the new CIS instructions reaffirmed the requirement that a party attach copies of their “most recent tax returns with W-2 forms, 1099’s and – – three (3) most recent paystubs” there are obviously circumstances where one’s actual income or cash flow may be inconsistent with or not reflected in such documents, including whether in the form of “cash” or in the nature of phantom or passive income, deferred compensation, loans or capital distributions, and other types of perks or benefits. The recent changes to the CIS form anticipate these possible scenarios by the adding of certain questions under the “Additional Information” section of Part C (Income). Besides inquiring whether a party may have received forms of compensation such as bonuses, commissions or other distributions in addition to regular salary, the CIS now requires a party to disclose whether a party receives perks or other benefits of employment, including the extent to which an employer may “pay for or provide you with an automobile (leased or purchased), automobile expenses, gas, repairs, lodging and other”. Particularly where a party owns his/her own business or is “self-employed” that business’ payment of either or both parities’ personal expenses can be a significant aspect of a family’s cash flow and which is not readily reflected, if at all, on income reporting documents, but the existence of which might be gleaned in the inconsistency between income and expenses. Another issue raised by these CIS questions is the extent to which responses thereto may trigger Sheridan concerns in regard to a possible underreporting of income, particularly given that information in a CIS is made under oath. These are issues which should be assessed between an attorney and client as early as the initial consultation and/or before pleadings are filed.

Simply stated, these and other new changes in this CIS form highlight the importance being given to this document and the expectation that the parties as well as their attorneys take this document seriously. I still remember the predecessor to the current CIS which was called the “Preliminary Disclosure Statement” (PDS) for short. The level of information requested and the comprehensiveness of the two documents are like night and day. As I previously blogged, the effort extended in preparing a complete and accurate CIS will be rewarded, while a poorly drafted, incomplete or inaccurate CIS will not only impede a prompt and effective resolution of the case, but may also serve as fodder upon which to destroy that parties’ credibility with the court and as a tool used by the other side to unravel the truth about the marital finances.