The Rule 8.05 – Financial Declaration in Mississippi Divorce Law
Early in the process, perhaps even when you retain your lawyer, he will give you a 10-page financial declaration to complete. This is your 8.05 Financial Declaration, named after Uniform Chancery Court Rule 8.05, which makes submission of the form mandatory in divorce and other cases involving child support.
Unless both parties (and the judge) agree to waive submission of the 8.05, it is mandatory. Many judges categorically refuse to waive 8.05s.
Click here to find an exemplar of Mississippi’s Form 8.05.
Importance of the 8.05
In a moment we will review the 8.05 form, but first let’s think about its role in your case. It is a pain to complete, and some of the information required is irrelevant. Many parties think of the 8.05 as a chore (which it is) and a meaningless technical requirement (which it is not).
If you have read our Guide on Dividing Assets in Divorce, you have already seen that before the chancellor divides the assets, they have to be listed and valued. The 8.05 is where you provide your schedule of assets and debts. Our Guide on Alimony explains that, in considering an award of alimony, the court compares your income and expenses with your spouse’s. The 8.05 is where you list your income and expenses. If you have read our Guide to Child Support, you have seen that the children’s expenses, and their parents’ relative ability to pay those expenses, is central to an award of child support. The 8.05 is where you list the children’s expenses.
Suffice it to say that the 8.05 is the Grand Central Station of all of the financial decisions that will be made in your case. All of the financial trains run in and out of this form. It must be built right. The quality of a chancellor’s decision is in direct correlation to the quality of information provided. The chancellor can’t base his ruling on your financial reality if you haven’t shown him what that reality is.
The 8.05 not only supplies information in your case, but also credibility. This form may be the first impression that you make on the judge. We have seen parties (not our clients!) sitting on benches in courthouse hallways, scribbling away on their 8.05 form just a few minutes before their hearing begins.
A last-minute, slapdash approach undermines your credibility before you ever say a word. Think about it — if you were a judge, which would carry more weight with you? An organized, typed document with supporting schedules, tax returns, etc., or a hand-scrawled, incomplete form, with numbers that don’t add up and key information missing?
Pain though it is (and it is a pain), completing the 8.05 with accurate information is probably your most important project in the case. Fortunately, you will not have to complete it alone. Lawyers typically give the client a blank 8.05 form, with basic instructions on how to complete it, and advise them to do the best they can with it.
The important part is that you actually do the best you can with it, and soon. You might have a temporary hearing coming up, and you need to complete this form ASAP.
Once you’ve done your best, sit down with your lawyer and review it carefully. At a minimum, all of the numbers should be consistent. By “consistent,” we mean both internal consistence (that is, values for the same item should be the same everywhere that you list that item in the 8.05), and external consistence (the values that you list should be the same as those listed on external documents, such as tax returns, pay stubs, bank statements).
We’ll talk about consistency in more detail, below. The points here are that, first, it takes a fair amount of attention to detail to complete the 8.05 properly; second, you will need your lawyer’s help, just as he will need yours; third, the earlier that you get started, the better you will do; and fourth, done well, an 8.05 adds enormous value to your case.
But yes, it is a pain.
8.05 Page One — The Preliminaries
There’s not much to the first page. List your name, address (typically the same address used in your complaint for divorce), and what you do for a living. If you are unemployed, say so. If you are retired, say that.
Yes, you do have to list your date of birth. No, you don’t have to list your Social Security number.
Under the section for children, it’s a good idea to list the children of the relationship being considered by the court, and then the children from other/prior relationships. It’s not a bad idea to list adult children if you are providing financial support (or are asking the judge to order the other party to do so), but you want your 8.05 to be quite clear as to which children are and are not the subject of this lawsuit, as distinguished from children from a prior relationship.
8.05 Page Two — Your Income
Page 2 of the 8.05 form is where you list your income. It is divided into two boxes. The box on the top lists income from all sources. The box on the bottom lists deductions from that income.
Note that the 8.05 reports income and expenses per month. If you are paid weekly, twice a month, or anything else other than monthly, you or your lawyer will have to convert your paycheck into a monthly amount. Pro tip: If you are paid weekly, your income will be underreported if you merely multiply your weekly income by four.
The form is written with the wage earner in mind. The top box is where you list your gross pay, that is, before taxes and other deductions. If you receive other income, such as rental income or income from a business, retirement, Social Security, or any other source, list that in the top box, too. The last line of the top box is where you list the total amount of all of your income from all sources, before deductions.
What about income that you receive sometimes, but not always, such as overtime and bonuses?
This is a conundrum, since if you list it as if you receive it every pay period, your income will be overstated, while if you leave it out, your income will be understated. You will want to discuss this issue with your lawyer, but as a general rule it is a bad idea to say nothing at all about irregular income. When in doubt, provide information as to what it is, how and when your employer pays irregular income (and why), how much you have received in the past, and what you expect to receive going forward. If you think that this income should be excluded, explain why. The chancellor may not agree with you, but you will retain more credibility than if you pretended that the irregular income did not exist.
List in the bottom box of Page 2 your deductions from gross pay, such as withholding for federal and state taxes, FICA, insurance, loan repayments, and so forth. The bottom line of the bottom box will often be the same number as your net pay, but not always.
This is because there are two ways to list deductions, and either method is valid. The first method is to list the actual deductions from your paycheck. The second method is to list only those deductions that the law allows you to take before child support is awarded. For example, your employer might deduct health insurance premiums, 401(k) contributions, and loan repayments. There is nothing illegal or improper about these deductions, but they are disallowed for purposes of calculating your child support. Your lawyer will tell you which of these two methods to use.
Again, remember that the 8.05 reports monthly figures. So if you are not paid on a per-month basis, you or your lawyer will have to convert the income and deductions listed on your paycheck to monthly amounts.
“My divorce came as a complete surprise. I guess that’s what happens when you haven’t been home in eighteen years.”
8.05 Pages Three and Four — Expenses
For most people, the most difficult part of the 8.05 form is compiling their expenses. You are required to list your expenses and the expenses of the children. Where you can, you should differentiate between your expenses and your children’s.
The Expenses Section invites a number of conundrums:
Should you list your current expenses (present), what your expenses historically were before the breakup of the marriage (past), what you expect your expenses to be when the case is over (future), or what your expenses need to be (aspirational)?
What part of fixed expenses, such as rent/mortgage and utilities, should be attributable to you and what part to the children?
How do you list irregular, non-recurring expenses?
As we’ve noted, the watchword on completing your 8.05 is accurate disclosure. However you resolve these conundrums — and there’s no universal answer to any of them — the key is to accurately disclose what you’re doing. For example, if you decide to list aspirational expenses (what you’d like to spend if only you had the money to spend it), then be sure to make that clear. While you’re at it, why not add another column, one for present expenses, another for aspirational expenses.
Chancellors are used to litigants who are seeking money to puff their expenses. By the time you arrive at the courthouse, your judge will have over the years seen countless 8.05s and observed hundreds (if not thousands) of cross-examinations on the subject of someone puffing their expenses. You, too, should expect to be cross-examined. Your chancellor will have a pretty good idea of what is and isn’t a reasonable expense for groceries, clothes, insurance, etc. If your numbers are too far out of line with what your chancellor is used to seeing, you will need to have a convincing explanation of why this is so, or else your credibility will suffer. We have seen any number of witnesses admit on the witness stand that they really had no idea of what their expenses were and that the numbers they wrote down on their 8.05 form were just a guess. It’s not a good look.
There are some line items that don’t apply to you. If you don’t have a maid, then on the row listing Maid Service, you’ll write down $0. There are also some expenses that you regularly incur, which you won’t find listed on the standard 8.05 form, such as HOA dues and WiFi service. Fortunately, the form does have several rows for OTHER, and this is where you’ll list those.
Whenever you are departing from predictable, regular expenses, it’s helpful to note on the form what you are doing. For example, a one-time expense (e.g., $3,500 to replace the HVAC unit on the house) can be noted in a separate line item — just be sure that it’s clear that it’s a one-time expense and that you’re not listing $3,500/month. The 8.05 form does not have a space for inputting footnotes, but we strongly recommend that you put them in anyway whenever you are listing an unusual item.
On Page 4 you will list the amount that you spend on debt service each month. To explain this, let’s jump ahead to Page 7, where you list your debts and the amount that you pay toward your debts each month. At the bottom of Page 7, you will list a total amount that you spend on debt service.
Take that number and plug it into the row on Page 4 for debt service. Be careful, though. You will have already listed (on Page 3) what you spend on your mortgage and your car notes, so those amounts should be deducted from the total that you list on Page 4 for debt service.
Chancellors delight in comparing what you listed on Page 2 (after-tax income) with what you listed on Page 4 (total expenses). If your expenses are significantly more than your income, you will need to have a good explanation of why this is so. We have seen more than one chancellor take over a cross-examination with a question along the lines of, “How do you explain that you claim to spend $6,500/month when your income is only $3,200/month?” If your 8.05 has such a disparity between income and expenses, you must be prepared to explain it.
Pages Five and Six — Assets
The next section of the 8.05 deals with assets. In a divorce case, you will list not only the assets that you consider to be marital property, but also those which you consider to be your separate property, although for the latter you will want to clearly indicate that these are part of your separate estate and are not to be included with marital property. But don’t omit them.
Before we review the different categories of assets, we should point out how important it is that you list all assets in your 8.05 declaration. You will sign and submit the form to the other party, and if the case goes to a trial or hearing, your signed declaration will be submitted to the chancellor. Your signed 8.05 declaration is a statement made under oath, just as if it were an affidavit, or testimony given in the courtroom after being sworn in — in other words, the chancellor can find that you are in contempt of court if you make material omissions from your 8.05. Also, any division of assets that the chancellor makes that is based upon your 8.05 is subject to being withdrawn/vacated if there were material omissions/misstatements in your 8.05. The point is that it is important to scrupulously list everything in your declaration.
Real Property. This is where you list the marital residence and any other houses, acreage, and mineral interests. If you own only a fractional interest in the property, list it, and also list the other owners. If the property has been recently appraised, it is helpful to note this fact, as well as the dates of the appraisal and the date as of which the property was appraised.
If you have a HELOC, be sure to list it on the Mortgage Balance line, but separately from the mortgage. In other words, your form will show a first and second mortgage and the amount of each.
As we have noted, Page 7 is where you list your debts. The balance due on the mortgages that you list on Page 5 should be the same as the balances shown on the debts listed on Page 7.
Motor Vehicles. This is where you list not only cars and trucks, but also motorcycles, 4-wheelers, trailers, cars, watercraft, and aircraft. Although the form does not have a blank for this, it’s helpful to the chancellor to note who is the regular driver/user of each vehicle. Chancellors tend to award ownership of cars and trucks to the people who usually drive them; rather than have to review their notes of the trial testimony on this subject, it’s helpful to just list this information in your 8.05.
There are a number of online services that will provide a value for your vehicles, including not only cars and trucks, but also ATVs, watercraft, aircraft, and tractors. If you don’t know what your vehicles are worth, it can be helpful to see what these online services say.
Personal Property. This is where you list your home furniture and furnishings, tools, jewelry, art, equipment, and the like. You can be as detailed as you like, but generally you won’t list anything with a value less than $500, unless it has particular sentimental value.
The value that you will list is emphatically not replacement value or cost. It is instead what you can sell it for — garage sale value. You might have paid $2,000 for your computer, but now you can’t give it away, so it has practically no value. The same is true for most furniture and furnishings.
In divorce cases, it’s not unusual to see parties have wildly different values for the same item of personal property. For example, the wife might list the antique dining room table as worth $500 while the husband says that it is worth $7,500. Chancellors sometimes resolve the dispute by awarding the asset to the spouse with the higher value — awarding the table to the husband but awarding the next $7,500 to be distributed solely to the wife.
It costs about $400–$500 to have a professional appraiser come to your home to inspect your personal property and make a written report of values. Unless you and your spouse can agree to divide personal property so that both “piles” have about the same value, getting an appraisal is an inexpensive way to resolve disputes about what the personal property is worth. It’s especially helpful to have an appraisal of specialty items like jewelry, art, firearms, and collections.
Checking and Savings Accounts. This is where you list bank accounts, including both joint accounts (with your spouse), sole accounts (just you or just your spouse), and other accounts (such as an account with your siblings or parents). If the account is in the nature of a trust, such as one set up to administer an elderly parent’s retirement check, list that account but include a note on the 8.05 form what the nature of the account is. During your testimony, you can explain that this is neither marital nor separate property, but someone else’s money altogether.
The form calls for you to list the balance on the accounts, but it does not call for you to list the date of that balance. Since balances change constantly, it’s helpful to state the date of the balance.
Other Investments. This is where you will list IRAs, 401(k)s, investment accounts, CDs, and other financial investments. As with checking and savings accounts, list everything and provide any necessary explanations. Since balances are likely to be volatile, you will want to list the date of the balance provided.
Life Insurance. This is where you list all of the life insurance policies that are presently in force on you or your spouse, including those that are in place through employment. Even though they have no cash value, term life policies should be listed, since the chancellor has to consider whether to order one or both spouses to maintain the policies.
All Other Assets. Any other assets should be listed here, such as business interests, intangible assets (e.g., copyrights, patents, and trademarks), legal claims (whether suit has been filed or not), insurance claims, notes receivable, unpaid bonuses and commissions, and cash. Chances are that with hard-to-value assets, such as a copyright, the chancellor will not be too concerned if you list the value as “Unknown,” or “To Be Determined.” However, by the time of final trial, you should be able to list the fair market value of each asset and be prepared to explain how you or your appraiser arrived at that value.
Page Seven — Debts
List all of your debts, including your mortgage, HELOC, car/truck notes, credit card and other unsecured debt, loans from insurance policies and retirement accounts, debts owed to your employer, unpaid tax liabilities, debts owed to family members, and unpaid attorney’s fees.
The form asks you to list monthly payments, but some of your debts might not have monthly payments (such as your HELOC and unpaid tax liabilities). If you are in the process of making payments, then list these payments. Otherwise, you do not have to list a monthly payment if you do not make one.
We noted that when you list balances for your bank accounts, it is helpful to list the date of the balance (e.g., $2,158.17, as of January 1, 2021). Your lawyer might want to do the same for your debts, particularly those with volatile balances, such as credit card debts.
Most consumer debts are liquidated, meaning that there isn’t much question about how much is owed. But sometimes a debt is unliquidated, meaning it’s unclear how much you will ultimately have to pay. There are also contingent liabilities, which are those that you might not ever have to pay. For example, if you are a defendant in a car crash case, the claim being made against you is both unliquidated (since there’s no way of telling how much you will have to pay) and contingent (because you might not owe anything at all).
Your lawyer will guide you on how to list unliquidated and contingent liabilities. As with assets, it’s important to list all of your debts, even the ones that you might not have to pay.
Employment History and Tax Return
Finally, you are required to list an employment history, which includes a description of your earnings from the date of your marriage to the present, or, in a post-divorce case (e.g., for modification or enforcement of alimony or child support), from the date of divorce to the present.
In addition, you are required to provide your state and federal tax returns (including schedules and attachments) from the previous year. If you haven’t filed them yet, then provide your W-2, 1099, K-1, etc., as might be applicable.
