(with apologies to Oscar Wilde)
In every divorce, custody and child support case, a party is required to file a financial statement with the Court signed under the penalties of perjury. This statement includes information regarding children, if any, employment income, tax information, expenses, assets and liabilities. It is crucial that all such information be absolutely accurate and complete.
Sometimes a party may feel reluctant to disclose accurate information such as income if self-employed, feeling it is in their best interest to underreport. This will be extremely harmful. Each party will have the right to demand financial documents from the other party such as past tax returns, business records and other financial records. If such information shows that the financial statement contains misrepresentations, the consequences will be extremely harmful to the party making such misrepresentations.
As a family law attorney, I have observed the unfortunate consequences resulting from hastily conceived and inaccurately written financial statements. Experienced family law practitioners are well aware that the financial statement is one of the most important documents that is filed during a family case. The financial statement is one of the most important documents that will be filed with the court. The importance of accuracy and completeness cannot be stressed enough. Any mistakes made on the financial statement, no matter how inadvertent, will usually come back to haunt the proponent of the statement. It is of little solace to a client when an attorney’s inadvertent omission or inaccuracy is attached to the client as if permanently glued despite the attorney’s mea culpa to the court.
Even an honest mistake will have harmful consequences. A very instructive case is Gexler v. Roberts, 92 Mass. App. Ct. 1109 (2017). In Gexler, the parties executed a separation agreement which was incorporated into a judgment of divorce nisi in January of 2001. The agreement divided the following assets: marital home, automobiles, personal property, and an escrow account containing proceeds from Gexler’s worker’s compensation claim. The agreement was silent as to any retirement assets of either party. At the time of the divorce judgment, Gexler’s financial statement stated the hand-written word “NONE” for the category of “Pensions” on his financial statement. Both parties were represented by counsel.
In 2014, the ex-wife, Roberts, filed a complaint for property assignment of a marital asset (Gexler’s pension). The trial court ruled that Gexler misrepresented the pension by denying he had any retirement assets. Even though he was assisted by counsel, the Court held that a financial statement is the responsibility of the party as to accuracy. Although Gexler argued that he thought the pension would not be divided because his ex-wife got half of his worker compensation claim, the court held that omission of the pension from the financial statement and the divorce agreement was fatal. The decision was appealed and the Appeals Court held that the ex-wife could still go after a division of the pension after many years because Gexler’s financial statement did not disclose the existence of the pension.
The Appeals Court stated that “at issue here is whether the parties contemplated and actually litigated the division of Gexler’s pension.” The Court focused on the fact that it was undisputed that the divorce agreement made no mention of any pensions, and Gexler’s financial statement, filed at the time of the divorce hearing pursuant to Rule 401 of Supplemental Rules of the Probate and Family Court, lists the hand-written word “NONE” under the§ 10b heading for “pensions and other retirement plans.”
The Court accepted the lower court’s finding that Roberts’ testimony that she did not know of the pension and that she learned of the pension years later, was credible, which then prompted her to bring this action once she learned of the existence of the pension years later.
This is a good example of unintended consequences. While the statement of no pension in the financial statement may have been inadvertent or made under the belief that the pension need not be disclosed, it still created a misrepresentation. Thus, it is crucial that a party to a family law proceeding provide accurate and complete information. The moral to this tale is that any carelessness and lack of due diligence on the part of the attorney in preparing a complete and accurate financial statement may result in a client being treated harshly by the courts. Your attorney must rely on the truthfulness of the information the client provides. Inaccurate information, even if inadvertent, will always come back to haunt the party and credibility in the eyes of the judge will be lost.