Answer: Fairy Tales Can Come True.

Net Worth Statements are useless and almost never present truth.Lawyers do something that totally confuses me. They insist on their clients producing net worth statements.  The net worth statements contain the assets and debts of the client and their monthly budget.  The monthly budget includes every expenditure that you are making including past and projected expenses.

Frequently, net worth statements are inaccurate, inflated and not verified.  For my purposes, they are useless, but attorneys insist on doing them and I understand it is part of the court process.  When I ask other attorneys if these net worth statements are accurate, they kind of smile and say, “Well, not really.”  Sometimes they say they are ridiculous, wrong, and fabrications.  You know, what the rest of us call B.S.

In my mediation practice, I have my clients bring in monthly statements – actual statements directly from the credit card companies, banks, mortgage holders, etc.  When we put together a budget, we make sure we are working with the real numbers.  I help them do a financial analysis of their assets, debts, and budgets to see if we left anything out.  The pensions are valued.  The housing equity is determined independently.  The businesses are valued.  Non-pension retirement accounts are sometimes discounted for present day value.

We aren’t using our imaginations when creating budgets.  We are developing a plan for the husband and wife post-divorce.  This is a plan that we have worked on together and we believe it will succeed because we are not using net worth statements on which amounts are estimated.  We are using actual dollars and cents.

In litigation, the attorney often tries to show that the client needs more money than they actually do by inflating the numbers on the net worth statement because their job is to get the most for the client.  In mediation, we don’t have to inflate budgets for our clients to show that they need more money than they do.  We work together and cooperate and share the money so that both the husband and wife are able to pay their bills and live a life style within their means.

So when you come to the first mediation session with me, leave the net worth statements at home because, let’s face it, Net Worth Statements are STUPID!!

 

Please feel free to ask a question, comment, or request more information in the Comments Box below. And don’t hesitate to forward this blog to anyone you know who would be interested in reading it.

Don Sinkov

Don Sinkov
Your Divorce Mediator
Westchester County, NY
Putnam County, NY
Phone: (914) 588-6258
eMail: Info@YourDivorceMediator.com