Affidavit of Means & Family Law & Returning Money To Parents

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scatman

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I wonder if someone could clarify an issue in relation to affidavit of means in family law. Typically, is it just a snapshot of an individuals financial position at that fixed point in time,or would it be the norm to also look for copies of bank statements etc extending back say 1 year or 3 years of whatever ?

The reason I ask is that I am in a marriage breakdown situation, but it is not at an affidavit of means stage. My parents gave me 40K towards the purchase of a new house in 2006 (family home). It could be argued that they have an interest in the property, as they did not sign any disclaimer negating any interest, and that this is a legitimate course of action.

I would plan to repay them this money in advance of an (inevitable) affidavit of means being sought. They can then give this money to me over time, perhaps 3K each per year to avoid gift tax issues.

If an affidavit of means is just a "snapshot" rather than a look back, this might work for me. Any thoughts on this?
 
scatman said:
I wonder if someone could clarify an issue in relation to affidavit of means in family law. Typically, is it just a snapshot of an individuals financial position at that fixed point in time,or would it be the norm to also look for copies of bank statements etc extending back say 1 year or 3 years of whatever ?

The reason I ask is that I am in a marriage breakdown situation, but it is not at an affidavit of means stage. My parents gave me 40K towards the purchase of a new house in 2006 (family home). It could be argued that they have an interest in the property, as they did not sign any disclaimer negating any interest, and that this is a legitimate course of action.

I would plan to repay them this money in advance of an (inevitable) affidavit of means being sought. They can then give this money to me over time, perhaps 3K each per year to avoid gift tax issues.

If an affidavit of means is just a "snapshot" rather than a look back, this might work for me. Any thoughts on this?
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Is this not tax avoidance? Presumably if you are claiming the money from your parents was a loan (even though there hasnt' been any attempt at repayment in the 7 years since) then there would be documentation affirming such?

If the Revenue see money going from your account to your parents and then see money going back the other way over a period of time then questions might be asked.
 
There is sometimes such a thing as "trying to be too clever" and it rarely works out in one's favor in the end. In front of a Judge this type of thing is likely to scupper your whole credibility in one fell swoop.
 
I would suggest that you are aware of Section 37 of the Family Law (Divorce) Act 1996.

A court can look back 3 years before the date of application if it believes that attempts were made to dispose of property or assets to reduce an applicant's claim for relief.

A forensic accountant will have great fun showing fraudulent transactions and discovery orders can and will be made.

Get competent advice from a family solicitor.
 
Thank you all for your very detailed and comprehensive replies. OK, can I be devils advocate on this and pursue a slightly different line. I right now "gift" sum X to each of my parents that is under the tax threshold for child to parent transfers. My other half simply seeks an affidavit of means in 6 months time, and I correctly fill it out saying that my means are whatever at that point in time (minus 2x of course). I suppose what I am really asking is it the norm to simply look for a "point in time" affidavit of means in an amicable legal separation, or do people generally always look for 1-3 years worth of financial statements as well, even where there is no suspicion of other funds?
 
Why not just behave with integrity and honesty and do everything you can to make sure that your wife does the same thing?
In the long run you need structure and certainty and getting into this sort of thing will increase enmity and hostility and make the whole process more bitter and complex.
 
is it the norm to simply look for a "point in time" affidavit of means in an amicable legal separation
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Trying to hide money as indicated in the two schemes you outlined so far hardly implies an amicable settlement!

In your first scheme you said you would repay a sum of money given by your parents to buy a house and they would then repay this back to you over a few years. That's not actually paying back your parents!

Would you not be better off spending it ? That way it's gone and it can't be taken into account.
 
oh what a tangled web we weave when first we practice to deceive.

This will in all likelyhood rebound on you. Don't even begin to think this way.
 
When my other half went through his JS, he had to produce bank statements, loan statements and much more paper work for the previous three years. His ex had to do the same. As others have said, behave with integrity and honesty. Even if you don't believe in Karma, if you go down the dishonest route, it will bite you one day!
 
scatman said:
Thank you all for your very detailed and comprehensive replies. OK, can I be devils advocate on this and pursue a slightly different line. I right now "gift" sum X to each of my parents that is under the tax threshold for child to parent transfers. My other half simply seeks an affidavit of means in 6 months time, and I correctly fill it out saying that my means are whatever at that point in time (minus 2x of course). I suppose what I am really asking is it the norm to simply look for a "point in time" affidavit of means in an amicable legal separation, or do people generally always look for 1-3 years worth of financial statements as well, even where there is no suspicion of other funds?
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as per rules of the circuit court (i'm not allowed to link), you are required to vouch your Affidavit to within 12 months on the day it was sworn

your affidavit of means is sworn testimony, the same as getting into the box and giving evidence under oath, so if you lie, you a committing perjury. now some judges in phoenix house may go easier on you for telling a few porkies BUT it damaged your credibility greatly and if there is a matter in dispute and you have damaged your credibility then and you risk losing a lot more on that point than you stand to gain.

if you owe your parents 40k then it is a debt and accordingly should go in your 3rd schedule of your affidavit of means, but be prepared that your parents may be called to give evidence to prove the debt or produce documents showing they put the money in.

in short dont lie on your affidavit or be play clever with the court as you will get caught and it will have an effect on your case
 
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