If you and your spouse are not seeing eye-to-eye on financial issues in your divorce and/or if there are tricky financial issues for you to untangle in understanding what a fair financial outcome even is for you in your divorce, your attorney may suggest retaining a forensic accountant. If you’re already spending funds on an attorney, the idea of paying for another professional to help sort out your divorce may feel unnecessary or burdensome.
Many divorces – really the majority – are able to proceed to a fair conclusion without the assistance of a forensic accountant, but in many other cases retaining an experienced forensic accountant can be exponentially beneficial to getting you the property distribution and/or child and spousal support outcome that works for you.
Issues in a Divorce Where a Forensic Accountant Provides Value
Although your attorney should be experienced in handling the purely legal aspects of your case – generally, determining your rights and obligations and negotiating, advocating, and litigating on your behalf – a forensic accountant will focus on sorting out the complex financial issues that will form the basis of your attorney’s work, and often in a more efficient manner than a law firm can do. And unlike your attorney, the forensic accountant can testify on your behalf as to the disputed issues, as well as providing reports and other data that can be used in negotiation, mediation, or litigation.
Here are several areas in which a forensic accountant provides value to your case:
● Valuing Assets. When there is a closely-held business, there will need to be a valuation of what that business is worth, including the goodwill value of the business, and a forensic accountant can provide this service. A forensic accountant can also assist in valuing other assets subject to division in a divorce.
● Tracing Separate and Community Property. Where assets include both community and separate property value – such as where a person bought a home prior to the marriage, but used their income during the marriage to pay the mortgage and make improvements – a forensic accountant can help determine what the community property value in the asset is and draft reports supporting this determination.
● Assessing Spousal Support and Child Support. Income is a primary factor in determining spousal support and child support numbers, but often there are additional issues a forensic accountant can investigate to reach a more accurate income number. For example, where a person is self-employed and deducts personal, non-business expenses that might not grab the attention of the IRS, a forensic accountant can spot these issues and present evidence for why such expenses should be added back to income to reach a fair number. A forensic accountant can also determine whether a person is receiving perquisites such as use of a company car or other allowances which should be added to income in calculating support. Furthermore, a forensic accountant can also collect and present evidence showing a person’s marital standard of living to bolster support requests.
● Assessing Wrongdoing. Where another party is hiding assets – such as through temporarily placing assets with a family member during the pendency of the divorce or misreporting their business’ assets or income – a forensic accountant can work to spot these issues and bring them to light. A forensic accountant can also assess the other party’s general spending behavior to determine where funds are going, e.g. to pay the expenses of a new girlfriend or boyfriend.
Why Using Your Personal Accountant is Likely Not Ideal
It may be tempting to want to use the services of your personal accountant or a friend to reduce expenses or help provide them business, but, while a forensic accountant will certainly rely on universal aspects of accounting, forensic accounting in the context of a divorce is a particular practice that you will want the person on your team to be familiar with to best serve your interests.
Forensic accountants who focus on family law understand the basic concepts of divorce law underlying the determinations of distribution of property and spousal and child support, and will focus their work and work product to reach your best possible outcomes under those legal guidelines. Furthermore, a forensic accountant may well need to participate in the negotiation and/or litigation process, such as through providing a declaration to the court, being deposed by the other party, or testifying in court, and an experienced family law forensic accountant will be prepared to present the evidence supporting your position in such contexts.
Guidance on Your California Family Law Questions From a Westlake Village Family Law Attorney
If you would like to learn more about how our office can provide guidance on any California family law issues you are facing in Ventura County or Los Angeles County, contact the Zonder Family Law Group office today at (805) 777-7740 or (818) 877-0001, or schedule your strategy session using easy-to-use online form here.