By: Joseph Goldy, CFP®
Arguably one of the most important documents a divorcing couple in New Jersey will complete is their Case Information Statement or CIS as it is commonly known.
The CIS is a required form in New Jersey divorces, and its purpose is to paint an accurate picture of each party's financial situation. The form is 10-pages and has seven sections, A through F, detailing a specific area of a person's financial life. It is important to note that the CIS is needed by your attorney regardless of if you plan on mediating, arbitrating, or litigating.
The CIS's importance stems from the fact that attorneys use this document to understand where their client (and the other divorcing party) stands financially and effectively advocate on their behalf.
Unfortunately, despite the importance placed on the CIS, the client is often left to complete the form with little direction.
Correctly filling out the CIS form can be a daunting task for some people, particularly for someone who has not been the main person who handles the finances. Even for financially savvy people, the time required to complete the CIS accurately can be considerable.
Attorneys will review the completed CIS, and their involvement in its finalization is critical, but the time-consuming endeavor of completing this form is left to the client.
Making matters worse, the spouse who has not been involved with the family finances may have little knowledge of where to find the required financial information.
The CIS sections include basic family information, insurance, income, expenses, assets/liabilities, and an area for any exceptional circumstances (e.g., selling a closely held business or special medical needs of a family member). You will also be required to attach relevant documents such as pay stubs, proof of insurance coverage, W-2 statements, tax returns, etc.
Part D is where you will comprise a detailed budget of all monthly expenses. Part D is further divided into three "schedules."
Schedule A focuses on costs related to shelter or home operating expenses such as rent/mortgage, garbage removal, water and sewer, association fees, etc.
Schedule B lists transportation expenses such as auto payments, insurance, fuel, etc.
Finally, Schedule C is personal expenses that encompass items like unreimbursed medical costs, vacations, clothing, and pet care.
Part E of the CIS is where you will list assets such as real estate property, bank/brokerage accounts, retirement accounts such as IRAs and 401(k) plans, life insurance, etc. Liabilities include mortgages, credit card balances, and any other short or long-term debt obligations.
Importantly, when you are listing assets, you will also list the date of your evaluation. It is of paramount importance to record the value of assets and liabilities as accurately as you can.
The importance of form CIS cannot be overstated. It is the basis for your attorney's ability to negotiate on your behalf in a divorce proceeding effectively. You can also unintentionally present yourself in an untrustworthy light to your spouse and their attorney if it is proven later in the divorce process that something was inaccurate.
Fortunately, if you are working with a wealth advisor who is a CERTIFIED FINANCIAL PLANNER™ practitioner, much of the information requested on the Case Information Statement likely has already been gathered in the first step of the financial planning process. At HIGHLAND, understanding the client's personal and financial circumstances kicks off our planning process and coincidently overlaps with the same data needed to complete the CIS.
We work with clients to build an accurate personal Cash Flow Statement and their Statement of Financial Position, including assets, liabilities, and net worth. The information is the basis of the financial planning work we do for clients. A wealth advisor familiar with a client's situation in this level of detail can be indispensable for someone going through a divorce. Specifically, for the person who has been less involved financially and needing financial education, along with understanding their actual post-divorce financial situation, an advisor will be able to provide considerable value.
Clients who need help filling out their Case Information Statement can work with their advisor to ensure their financial picture is as accurate as possible before presenting it to their attorney. Since a fee-only planner typically charges a percentage of assets under management and not per hour, this is an excellent value-added service for our clients going through a divorce.
Although divorce can be a stressful, costly, and time-consuming process, getting help along the way whenever possible can alleviate some of that stress. One of the most significant advantages of working with a wealth advisor that offers comprehensive financial planning is the thoroughness of their process. As a client who is going through a divorce, use that process to your benefit and work with your advisor to make sure your Case Information Statement is as accurate as it can be.
Joseph Goldy, CFP®, is a wealth advisor and CERTIFIED FINANCIAL PLANNER™ at Highland Financial Advisors, LLC, a fee-only fiduciary wealth advisory firm based in Wayne, New Jersey.
Joe specializes in working with newly independent women because of divorce or losing a spouse. He understands firsthand the value of having a clear financial picture pre- and post-divorce and a plan to restate goals as a single person. When he is not helping clients, Joe enjoys spending time with his two sons outdoors and volunteering to help raise money for Type 1 diabetes organizations.