Divorce may involve many emotions and legal issues, but it also boils down to mathematics. Forensic divorce lawyers and accountants can help place a value on assets and discover income streams, especially in a high asset divorce, that may be important to property division and your financial future.
Value of certain assets
The value of assets and debt must be determined before they can be divided. It is important to establish the value of your business, real estate, furnishings, artwork, jewelry, antiques, clothing, collections such as wine and other personal property. Many times, the value of deferred compensation must be estimated because it does not have a present value.
Specialization may be required for many categories of assets. Specific knowledge may be necessary for appraising the intellectual property for an artist, for example. Experience could be required for placing a value on a physician’s practice.
Real estate valuation may need an expert who is familiar with the duties of a broker and real estate appraiser. This can also require expertise in commercial or residential real estate and the geographical area where the property is located.
Income and lifestyle expenses
Income tax returns and forms may not fully disclose actual income, cash flow and income sources. An expert may find the amount of cash that was available to pay for family expenses and the sources for this cash.
In addition to tax documents, other records may need examined because taxable income does not match the actual financial resources available in savings or for paying expenses. Experts can also assess whether a family has distributed tax benefits and liabilities such as net operating losses and carry forwards.
An expert may have to examine both spouses’ spending. This respective lifestyle analysis can play a large role in determining whether there should be support and its amount.
Couples must address marital property acquired during marriage and premarital property obtained before marriage. Generally, marital property may be divided while premarital property can remain with the spouse who brought it to the marriage.
Some property acquired by a spouse during marriage may be their separate property. It can be excluded because of its source and when it was acquired.
An expert can trace this property to determine whether it should undergo property division. For example, a spouse’s inheritance can be entangled with other assets if it is deposited into a bank account that is later used to purchase a large asset such as a house. An expert can trace the source and journey of the original inheritance so that it can be part of divorce negotiations.
Forensic law and accounting may play a larger role if the couple is engaged in litigation and cannot negotiate the division of their assets and debt. They can help untangle assets, uncover fraud, find hidden assets, and develop transparency.