In most divorces, each spouse will have to complete and submit a financial affidavit called a Domestic Relations Financial Affidavit (DRFA) to give each other and the courts a clear understanding of each party’s assets, liabilities, income and expenses. The court will use the affidavits as a springboard for equitable distribution, child support and alimony calculations. A lifestyle analysis for alimony in Gwinnett County can be extremely useful when it comes to completing DRFAs and deciding alimony awards.
Lifestyle analyses, usually constructed by a financial attorney or an accountant, is a professional analysis of your standard of living during a marriage. It reconstructs your financial lifestyle during marriage, including expenses, income and spending habits. Because the pre-divorce standard of living is one of the main factors on which the court bases award alimony decisions, a lifestyle analysis can have a huge impact on the financial outcome of a divorce.
What a Lifestyle Analysis Entails
When your divorce attorney and forensic accountant conduct a lifestyle analysis, they will review your financials over the past few years. Below are some of the items they will review.
- Checking, savings and brokerage account statements
- Checks, debit card usage and cash withdrawals
- Credit card statements
- Large, non-recurring purchases, such as a second property or a home renovation
- Business expenses and income
- Tax returns
- Health, life and disability insurance
- Recurring expenses, such as utilities, housing, travel, entertainment, education
Upon completion of the review, the accountant will draft a lifestyle analysis report that shows a comprehensive picture of the couple’s financial lifestyle over the past three years. In the report, expenses will be broken down by category, all sources of income will be detailed and the end result is a clear picture of the couple’s shared lifestyle prior to separation.
The lifestyle analysis will serve as a tool for attorneys to negotiate a settlement. It also will uncover any hidden assets, reconcile discrepancies, and clear up any misgivings or confusion about concealed spending habits. The report will give the spouse requesting alimony a good idea of how much support to ask for in order to maintain his or her standard of living after the divorce. Similarly, if one spouse seems to be seeking an unfair amount of alimony, the paying spouse can use a lifestyle analysis to show that the amount is unreasonable and not in alignment with their pre-divorce standard of living.
Healthcare and COBRA Considerations
One subject that lower wage-earner spouses are often concerned with is keeping health insurance after the divorce. During the lifestyle analysis, health insurance and the quality of care to which you had access is one of the factors that plays a role. If you had coverage under your spouse’s employer-based insurance, you likely will be entitled to keep the coverage for up to three years by applying for “COBRA” (Consolidated Omnibus Budget Reconciliation Act). COBRA, mandated by the federal government, is continued health insurance under an employer plan for divorcing spouses.
If you are qualified for coverage under COBRA, note that it will be you who is responsible for paying the premiums, not your ex or his or her employer. And because COBRA can be very expensive, many spouses elect to opt out. You might find more affordable coverage under your own employer’s plan, a private plan or a government-subsided plan through the Healthcare Marketplace.
Call the Ward Law Firm to Discuss a Lifestyle Analysis for Alimony in Gwinnett County
If you’re concerned about securing alimony, insurance and making ends meet after the divorce, our divorce team at the Ward Law Firm in Georgia can help. We can assist you with all financial aspects of your divorce and help negotiate a settlement that provides for your security. Contact us today at 770-383-1973 or fill out our online contact form for a no obligation REAL Case Analysis.