The affidavit of financial information or “AFI” is a document each litigant must complete under oath and file in any Arizona family court case involving requests for child support, spousal maintenance, and/or attorney’s fees. A copy of the form used in Maricopa County Superior Court can be found here.
What is the Affidavit of Financial Information?
The AFI is an inventory of an individual’s income and expenses used to prove his or her financial circumstances. As its name implies, it is an affidavit, meaning its contents are sworn to be true and accurate under the penalty of perjury. Because it is exchanged with the opposing party or the opposing party’s attorney, a litigant should expect its contents to be carefully scrutinized and for any discrepancies to be used to impeach the filing party’s credibility.
Gross Income on the AFI
The AFI requires each litigant to include all sources of gross income (before any taxes or withholdings). It will ask you to list what you make on a monthly basis. If you are paid biweekly, you multiply your gross pay by 2.165 (not 2) to arrive at your monthly gross income.
If you have variable income like tips, commissions, or bonuses, you should annualize those sources to accurately calculate your monthly income. In other words, if you receive one annual bonus of $12,000, you would list that as a monthly bonus of $1,000 even though it isn’t distributed to you that way.
You will also be required to attach the two most recent paystubs and the last three years of your tax returns.
Business Income vs. Personal Income
One of the most common questions comes from self-employed clients who may confuse business revenue with personal income. The affidavit of financial information is concerned only with the individual’s personal compensation. But that can be complicated when the individual owns a business. For most family law purposes, personal income will include any business expenses that directly provide personal benefit or decrease the individual’s cost of living. The AFI actually includes an inventory of the most common types of employer-paid expenses, like automobile or mobile phone reimbursement, for example.
Why Are Monthly Expenses Relevant?
Contrary to popular misunderstanding, the Arizona Child Support Calculator does not consider a parent’s monthly living expenses. In other words, the parent’s car payment or mortgage will not affect his or her child support obligation.
So why does the affidavit of financial information require you to list monthly expenses? It is to provide necessary context for a judge to make discretionary financial determinations, such as child support deviations or awards of spousal maintenance and/or attorney’s fees.
Like income, variable monthly expenses should be annualized. A great example is the electricity bill. If it is not paid pursuant to an equalized plan, the cost may fluctuate dramatically between the summer and winter months. Try to annualize these expenses for the greatest accuracy.
Do Not Exaggerate Monthly Expenses
Often the client’s first instinct is to exaggerate his or her monthly expenses to indicate that there is literally no disposable income from which the judge could award spousal maintenance or attorney’s fees. Unfortunately, doing so exposes a litigant to risk during cross examination, particularly since the opposing party will likely have access to all of the bank and credit card records exchanged during discovery.
More importantly, if the exaggerated accounting indicates that a party’s monthly expenses are comparable to his or her gross monthly income, then the expenses probably exceed the net monthly income. For this to be true, the court must infer that the individual earns more than he or she reports and gives the opposing party an opportunity to request attribution of a higher income—one sufficient to pay the listed expenses.
Consider, as an example, a recent case where a self-employed opposing party claimed he earned $4,000 per month. He also embellished his monthly expenses thinking it would insulate him from a support obligation. Our child support attorneys used the embellished AFI to argue that he earned at least $9,500 per month, a figure that would be necessary to cover the expenses he listed and the mandatory tax liability. The judge used our attributed this income on the child support worksheet.
What About Future Monthly Expenses?
When a party does not currently incur certain monthly expenses that he or she anticipates will be needed after the AFI is submitted, those expenses can be estimated and marked with an asterisk to represent they are anticipated.
This denotation is commonly necessary for litigants who seek spousal maintenance and cannot afford to live independently until it is awarded. It also could apply to parents who anticipate a change in childcare costs that may result from employment changes or changes to parenting time.
What If the Opposing Party Lies on the AFI?
This is one of the most common questions and it happens all of the time. If the opposing party misrepresents his or her income or expenses on the AFI, there will be an opportunity to cross-examine and impeach his or her credibility. Sometimes it is not obvious when a party misrepresents financial items during litigation so it is important to diligently investigate all information provided. The “simplest” way to do this is to consult with an experienced family law attorney. Self-represented litigants can use the same tools attorneys use to obtain information and evidence, including:
• Requests for Production;
• Requests for Admission;
It is important not to rely too much on a dramatic “gotcha” moment at trial. Particularly in family court cases, a party’s credibility is only so important. While it always nice to impeach the opposing party, the central focus always should be on the merits of your case to ensure the best possible result. This is not to say suggest there is free license to lie and obstruct litigation. A party’s dishonesty, discovery gamesmanship, and efforts to conceal material evidence can justify an order to pay the other party’s attorney’s fees and costs, as well as additional sanctions.