Top Tips for Form 8 Financial Statements

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*You can see this blog post, among several others by the lawyers at Henderson Heinrichs LLP, over at the Henderson Heinrichs LLP website.*

A Form 8 Financial Statement is a Supreme Court form used by family law litigants to exchange financial information.  It has 6 parts: 1) Income, 2) Expenses, 3) Property, 4) Special or Extraordinary Expenses, 5) Undue Hardship and 6) Income of Other Persons in Household.

The Form 8 Financial Statement is a crucial document in litigation because it provides asigning-document condensed summary of the financial circumstances of the litigant.  Because of the form’s usefulness, BC family lawyers often will exchange Form 8 Financial Statements with opposing counsel during settlement negotiations.  Whether in litigation or negotiations, the importance of a well-drafted Form 8 Financial Statement to a family law case cannot be understated.

Whether you are preparing your own Form 8 Financial Statement or you are working with your BC family lawyer, here are a few tips to keep in mind:

  1. Be accurate.

The Form 8 Financial Statement is a statement sworn under oath, meaning that the party swearing the document to be true should be prepared to be cross-examined on the facts alleged in the form at an Examination for Discovery or at trial.  Above all else, the most important part of completing a Form 8 Financial Statement is ensuring that it is true.  If there are errors in your Form 8 Financial Statements, it can undermine your credibility before the court.  If you are uncertain about the information you are providing, either take steps to increase your certainty or indicate that the amount is approximate or subject to verification.  For example, you may wish to indicate that the value of your employee pension is “unknown” if you have not yet had a pension valuation.

  1. Be detailed.

The Form 8 Financial Statement can be used by the parties and their lawyers as a guide to the parties’ incomes, assets and debts, and will be referred to again and again throughout a family law case.   Making sure that the Form 8 Financial Statement is detailed and clear will make it a more useful document to the parties and to the court.  For example, when you list your bank accounts, specify the institution, the type of account, and the account number.  Indicate whether your assets are held solely by you or jointly with another person (even if it’s just your spouse).  Make sure to indicate when you acquired your assets and debts, at least to the extent that it is clear whether the asset or debt was acquired before, during, or after the cohabitation.  Indicate the basis upon which you have fixed a value to the property, such as an appraisal, a BC Property Tax Assessment, or an estimate.

  1. Make sure that you have your relevant attachments.

Family Law litigants are required by Rule 5-1 of the BC Supreme Court Family Rules to produce a number of income documents, and all of the documents that apply to you must be attached to your Form 8 Financial Statement.  These almost always include your last 3 years of tax returns, notices of assessment, notices of reassessment, and your most recent property tax assessment.  For a full list please review Rule 5-1 on the www.bclaws.ca website.

  1. Include additional documents where necessary.

Although documents like bank statements and credit card statements are not legally required to be attached to the Form 8 Financial Statement, in many cases it can be very helpful to attach your most recent account statements so that the reader of the Form 8 Financial Statement can see where you obtained your values for the items under Part 3 – Property.  Balances on accounts can fluctuate from day to day, and by providing an account statement you provide a basis upon which to fix a value.

  1. Don’t be afraid to use footnotes.

Clients often have questions about how to complete the Form 8 Financial Statement, given that we are asking them to provide a financial “snap shot” during a period of profound changes to their finances. For example, in Part 2 – Expenses, a person may currently have minimal expenses when they swear the Form 8 Financial Statement because the parties are still under the same roof, but they want to be able to indicate what the housing expense will be when they move out in a month.  A footnote can provide that explanation.  Similarly, a footnote can be included to explain an expense where that expense has been estimated, such as estimating that “vacation” expenses are $375 per month, because you take two vacations per year that each cost $2,250.  These explanations can be incredibly useful when you are under cross-examination, as the Form 8 Financial Statement does not leave the reader guessing as to how the numbers were determined.

  1. Fill out all the parts of the document.

Read the entire document and ensure that every part applicable to you is completed.  Carefully consider: have you disposed of property in the last two years (Part 3), does your child have expenses that meet the test for special and extraordinary expenses (Part 4); do you meet the test for undue hardship (Part 5), are there other income-earning adults in your household (Part 6)?  A full and careful consideration of these questions is essential to the proper completion of a Form 8 Financial Statement.

  1. Ask yourself: does it make sense?

When your Form 8 Financial Statement has been filled in, but prior to swearing it to be true, you should review the document again and carefully consider whether the information in the Form is internally consistent.  For example, if your actual expenses greatly exceed your stated income, then we would expect to see a corresponding debt or some other explanation for the discrepancy.  If there is no explanation for the discrepancy, then it’s time to look back at either your income or your expenses to see if you have missed some piece of information.

*Nothing in this post constitutes legal advice and is for general informational purposes only. To establish a solicitor-client relationship with Virginia K. Richards please contact her at Henderson Heinrichs LLP using the information on the Contact Page.