In a contested divorce, you may need the court to determine how to divide your assets. Assuming you and your divorcing spouse cannot agree, you will need to obtain a valuation of the assets you plan to divide. You may also wish to analyze your income and expenses or locate assets that could be hidden by your ex.
These assets could be anything from a family business to real estate to deferred compensation and valuable personal property. What kind of experts do you need?
Valuing assets
If you have significant or complex assets to divide, you may need to hire a certified appraiser or business valuation expert. Typically, you want someone who has done this kind of work before, including testifying in court about their findings. Your divorce lawyer will typically have a list of experts they recommend.
When it comes to business valuation, there can be a lot at stake. Depending on the roles, if any, each of you played in the business, the share of the business you are entitled to could be substantial. Will one party buy the other out? Is there a preexisting exit plan? How will your share be pulled out of the business, or your ex’s share?
A business valuation expert can measure the business’s current and projected value and make a recommendation on a fair division.
In a contested divorce, your divorcing spouse may hire a separate appraiser or business valuation expert, who may come to a slightly different conclusion than yours. This is normal and expected. In negotiation or in court, you will find a way to resolve the issue of competing experts.
For real estate, your appraiser would ideally be not only an accountant but also a real estate broker. This is so they are familiar with market conditions in the area where your real estate is located.
Analyzing your income and expenses
For higher net-worth individuals, your exact income may not be readily determined based on tax returns or business books. You may need an expert to determine how much cash you actually have, your current income from all sources and what your overall expenses look like.
Generally, this will be a forensic accountant. This expert can delve into your records to determine things like taxable vs. actual income, tax benefits and liabilities, losses you can carry forward and other money that may need to be divided.
A forensic accountant can also help develop a picture of your usual expenses to help in setting spousal maintenance, if any.
Locating hidden assets and income
A forensic accountant is also an expert you may need if you suspect your ex is hiding assets or income.
He or she might trace various bank accounts in an effort to uncover hidden accounts, review corporate tax returns in depth, examine whether 401(k) and savings accounts have increased by more than the disposable income your ex has reported, or look into sources of cash that aren’t easily traceable.
Or, they might perform a lifestyle analysis, where they analyze income, expenses, assets and liabilities to uncover evidence of additional net worth. They might search for uncommon types of assets, such as cryptocurrency.
They might search for inconsistencies between the documentation your ex has presented and other records, such as tax returns, accounting books, bank statements, financial statements, canceled checks, credit card statements, invoices, contracts and even financial projections.
Ultimately, it is in your best interest to obtain a sound, credible valuation of your property and evaluation of your income. Talk to your divorce lawyer about what experts may be needed and how they should be chosen.