Statement of Wealth Form Template

A Statement of Wealth (SOW) Form is used by individuals and institutions for recording, authenticating, and assessing financial status. It provides an orderly overview of financial assets, liabilities, and sources of income.

The SOW is used in loan applications, estate planning, divorce settlement, and compliance with financial regulations. Financial institutions, such as banks or investment firms, may also require an SOW when performing credit checks or to satisfy AML regulations.

The main intention of completing the form is financial transparency. It describes where and how wealth has been created, and stored, and provides an accurate picture of net worth and financial health. Below, we discuss the purpose and context of the Statement of Wealth Form in detail, and what to include when completing an SOW template.

Statement of Wealth Form—Purpose

In simple terms, a Statement of Wealth Form consolidates various financial data points to present a structured view of the economic situation of a private individual. To financial institutions, this form provides important information with regard to the legitimacy and stability of a client’s financial standing. It can also be used as a check against fraud or discrepancies, ensuring that all declared assets and liabilities are verifiable.

For individuals, this form enhances financial awareness. It compels a person to carefully weigh and assess their assets and liabilities and often brings to light areas where additional attention toward financial management is warranted. It may, for instance, identify high-interest liabilities or underperforming assets to help fine-tune and adjust their financial decisions in the future.

When is a Statement of Wealth form Used?

A Statement of Wealth Form can be applied in countless situations. It’s a standard demand from financial institutions for loan approvals or when closing major financial deals to determine the applicant’s repayment ability. 

Estate planning professionals may also require this document to outline the distribution of assets in cases involving executing wills or trusts. Similarly, during divorce proceedings, this form becomes a pivotal document in dividing assets equitably. 

Another area where this form plays a key role is in regulatory compliance. These statements are usually called for by various governments and financial bodies to prove compliance with the laws of tax and anti-money laundering. The form will validate the source of funds in international transactions, like cross-border property investments, and prevent illicit activities.

The Key Provisions in Statement of Wealth Forms

Every SOW should include the following provisions. Use a template to customize the itemization of each clause you want in the document.

Personal Information

Capture personal information that identifies the individual submitting the form. 

• Full name as shown on legal documents like state ID cards or utility bills.
• Date of birth.
• Residential address and contact info for phone and email.
• Employer’s name and job position.

The provision of accurate personal information reduces errors during assessments. This section serves as the foundation of the form, connecting all subsequent financial details to a verified identity. 

For further validation, attach a copy of any government-issued ID or passport. This supplement provides full disclosure of business entities, where the name of the company and the registration particulars are included.

Employment History and Annual Income

This section gives a summary of the method of earning income. 

• Current and previous employers.
• Employment duration for each role.
• Annual income includes salary, bonus, and compensation payments.
• Supporting documentation may include pay slips or employment contracts.

These details help financial institutions assess the stability of income from verifiable sources and its impact on the accumulation of wealth. This section shows financial reliability by highlighting career progression and income consistency.

For self-employed individuals or business owners, it is essential to include income statements or tax returns that reflect revenue streams. Even diversified sources of income are often vetted for consistency as an indicator of financial stability.

Bank Accounts and Savings

Bank accounts and savings are indispensable in determining financial liquidity. The following should be captured in the form.

• Details of all bank accounts that are currently active, including account numbers and the associated financial institutions. 
• Current checking and savings account balances. 
• Documentation, such as recent bank statements, to verify account balances.

Savings accounts reflect prudent financial planning and the ability to manage liquid assets, which is an important aspect of financial health. It’s also useful to indicate whether the accounts are held jointly or individually and specify any international accounts. This section defines short-term financial readiness and the ability to meet immediate financial obligations.

Real Estate Holdings

For many people, real estate comprises a significant portion of their wealth. 

• Properties owned, address, and type of property – residential or commercial.
• Purchase dates and acquisition costs.
• Current market value and estimated equity.
• Any income from rent derived from the properties.

Including these elements provides clarity on tangible assets and their contribution to overall wealth. Details, such as mortgage information or ownership percentage in jointly held properties, further enhance the depth of this section. Underlining any major appreciation or depreciation in the value of the properties over time might give useful insight into the performance of the assets.

Financial Investments

Financial investments represent the diversification of wealth. The form should contain details on stocks, bonds, mutual funds, and retirement accounts like IRAs, the current value of each investment, and the date of purchase, as well as any dividends and interest earned. 

Include documentation, such as contract notes in respect of trade transactions or investment certificates. This information provides a picture of an individual’s long-term financial planning and risk management. 

Additional information on high-yield investments, capital gains, or losses may be attached. Information about investment advisers or portfolio managers might also illustrate a proactive attitude toward wealth management.

Life Insurance Policies

Life insurance policies assure not only financial security for the individual’s family but also build net worth. 

• Policy types and coverage amounts.
• Cash value or surrender value of the policies.
• Beneficiary Information.

Including this data ensures that all financial assets are accounted for comprehensively. If multiple policies have been taken, indicate what each serves, such as term life coverage or a wealth transfer strategy. Elaborate by providing policy maturity dates and premium amounts.

Liabilities and Debts

No financial statement is complete without listing liabilities.

• Total liabilities include mortgages, personal loans, and credit card balances.
• Outstanding balances and repayment schedules.
• Details of any liquidation agreements.
• Tax returns to verify annual tax obligations.

The form estimates net worth by subtracting total liabilities from total assets and listing debts. Interest rates, creditors’ names, and details about loan terms put the listed liabilities in perspective. It’s also useful for transparency to include any debts recently settled or disputes still outstanding.

Personal Property and Valuables

Personal property often involves high-value items that contribute to net worth.

• Vehicles, jewelry, art collections, and other valuables.
• Appraised values and dates of purchase.
• Any supporting documentation required to validate ownership and value.

These hard assets may not generate income but add to overall net worth. It elucidates the costs involved with the protection and maintenance these valuables receive by adding information about insurance coverage. With collector’s items, historical importance or rarity adds to the value.

Declaration of Source of Wealth Form

A declaration explaining how wealth was accumulated can include the following.

• How inheritances were received, including the beneficiaries and the amounts.
• The sale of company shares or businesses.
• Sale of property, stating the proceeds realized and the dates of sale.
• Compensation paid for litigation or settlement.

This section is very important for maintaining compliance. Adding corroborative documentation, like notarized or witnessed documents or written records of transactions, solidifies declarations. The overview can be contextualized by giving a summary of the major milestones that contributed to the accumulation of wealth.

Supporting Documentation

Verification is key when submitting a Statement of Wealth Form. The necessary documentation to accompany the form includes the following.

• Recent bank statements, and financial statements.
• Pay slips to prove income.
• Tax returns to confirm tax compliance.
• Property deeds and grant of probate—if applicable.
• Proof of retirement accounts, and investment certificates.

The supporting documents add accuracy and credibility to the information in the form. Grouping these documents logically or attaching a checklist can help coordinate things in the review process. 

Declaration and Signature

A declaration affirms that the information provided is accurate to the best of the individual’s knowledge. The individual must sign and date the form, taking full responsibility for its contents.

This step shows accountability. Adding a witness’s signature or notarization, if needed, gives more legal weight to the form and further asserts the declarant’s commitment to transparency.

Do You Require the Services of an Accountant or a Lawyer to Assist You?

Professional advice can be invaluable in preparing a Statement of Wealth Form. Both accountants and lawyers bring different levels of expertise to the process, depending on how complex your financial situation is, and the purpose for which the form is intended.

When to Seek Advice from an Accountant

An accountant is specifically helpful in cases where the task requires the analysis of detailed financial records for the calculation of net worth and the accuracy of reporting both assets and liabilities. 

These professionals offer the following services.

Organize and file all financial documents such as bank statements, pay slips, and tax returns. Identify the discrepancies or missing information that may cause delays in the process. Provide insight into investment performance, asset valuation, and overall indications of financial health.

Accountants are especially helpful for handling the affairs of entrepreneurs with multiple income sources, such as business owners or investors, making the process of compiling and analyzing financial data easier.

When to Consult a Lawyer

Lawyers become indispensable in managing the legal intricacies of completing the form. In matters of divorce, estate planning, or inheritance disputes rely on legal expertise when completing certain sections of the form.

A lawyer offers the following services.

• Ensure the form complies with local and state laws and regulations. 
• Deal with sensitive matters such as asset division, divorce settlements, or grants of probate. 
• Advise on structuring to avoid potential disputes. 

In situations involving regulatory compliance or international financial transactions, legal guidance ensures all declarations meet standards set by governing bodies. 

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