One of the most routine aspects of a family law file is the preparation of a financial statement in Form F8, otherwise known as an F8. Whether you are negotiating a separation agreement, or involved in a court action, an F8 is a foundational step in mapping out the way forward.
The purpose of an F8 is to paint the individual’s financial picture, by setting out 4 main categories of information: your income, your expenses, your assets, and your debts. The idea is to offer full and frank financial disclosure so that the parties, or the court, may determine a fair settlement of the issues in the file, such as child support, spousal support, and property division. Without this document, we would simply be conjecturing about the parties’ finances and how best to handle these various issues.
Preparing an F8 is one of the simpler tasks in a lawyer’s practice – it is the exercise of collecting a client’s financial information, something we do on a regular basis. However, this experience seems to be one of the most consistently challenging for many clients to go through.I have frequently heard clients say that it makes them feel “exposed” and, occasionally, even ashamed. They scrutinize their expenses in a way they may not have done before, seeing them reflected in a monthly chart, and often question whether they are justified in having the expenses they do. In particular, where there is a large disparity between their income and their expenses, it can leave them feeling like they haven’t managed their finances and are overcome by debt.
It is crucial for lawyers to remember that our clients are personally and emotionally affected by the work that is so perfunctory to us. Although we may not judge anything we see in a financial statement, seeing as we handle similar content on a daily basis, our clients may still feel vulnerable in having to put all of their personal financial details on paper for a stranger to see.
That being said, there is immense utility in having an F8 prepared. Not only do they provide the above benefit of allowing for an equitable resolution of the issues in the file, but they also allow the individual themselves to visualize their asses and debts in a way they might never have done before. I often hear clients commenting that they have been too busy or otherwise distracted from tracking what is actually going on with their finances. This can lead to significant financial mismanagement and confusion, particularly when parties are going through the complex process of separating and untangling their resources.
Preparing an F8 is not simply a routine task. It sets the financial perimeter of the action or agreement between parties. It should be handled delicately by lawyers, such that clients feel supported in representing their financial circumstances. Although divorce is generally a stressful process for most people, this experience can be vastly more positive and beneficial for clients who are receiving the requisite respect and sensitivity from their legal professionals.