In family law, forensic accountants focus on valuing marital estates, determining which assets and liabilities may be non-marital, determin- ing the parties’ incomes, and calculating alimony and child support.
With clients (or their spouses) who receive a W-2, calculating net income should be easy. Many divorcing couples have at least one party who is employed, receives a regular paycheck, and has federal income taxes withheld from each paycheck. Within certain boundaries, the taxpayer determines the amount of tax withheld by filing a W-4 form with the employer.
Here is an example of how a W-2 employee tried to use the IRS to conceal marital assets for distribution, and to hide income for support.

Hiding Income

In 2014, my client (the wife), filed for divorce. The husband, who was pro se, was a marketing manager for a large corporation, and was, therefore, a W-2 employee. Through her attorney, the wife engaged me to value the marital estate and to determine her husband’s income.
In 2014, the husband was ordered to pay the wife temporary support of $800 per week, or $1,600 bi-weekly. At the time, the husband’s bi-weekly gross income was $3,900 and his net income was $2,675. After paying temporary support, he was only left with $1,075 per pay period. The husband requested another hearing to reduce his temporary support obligation, which was reduced to $400 per week, or $800 bi-weekly.
The wife was not able to sustain at that level, so she requested another hear- ing, and the temporary support was adjusted to $600 weekly, or $1,200 on a bi-weekly basis. Under that scenario, the husband was able to retain $1,475 bi-weekly from his $2,675 net pay.
In 2015, the husband received a raise, bringing his bi-weekly gross wages from $3,900 to $4,400. His withholding have been around $350. After other deductions, his net pay shoul have been about $3,150. After tempo-rary support to his wife of $1,200, the husband should have netted $1,950 bi-weekly during the temporary support period.
However, the husband decided to increase his federal withholding taxes to $875 per pay period. This had the effect of reducing his bi-weekly net pay to $2,625, or approximately the same level as 2014, thereby hiding his $13,000 annual pay increase.
In December of 2015, the husband again wanted to reduce his temporary support obligation. He came to court with a pay stub that showed net pay of $1,875, and claimed that his pay was reduced. With temporary support payments of $1,200 to his wife, the husband claimed that he only had $675 per pay period, while his wife had $1,200.
Upon closer examination, there was a one-time adjustment of $750 (net of taxes) that caused the husband’s bi-weekly net pay to go from $2,625 to $1,875 that one pay period that he brought to court. Using the IRS as an accomplice, the husband was able to demonstrate, with his pay stubs, that his bi-weekly net income in 2014 was $2,675 and his bi-weekly net income in 2015 was $2,625, in spite of a 13% pay increase.

Summary of Husband’s bi-weekly wages, taxes, deductions, and net pay

*Other deductions include social security taxes, Medicare taxes, and health insurance

Summary of Husband’s annual wages and taxes

Hiding Assests

In addition to hiding income, this husband also managed to hide assets at the IRS.
From 2013 to 2016, the husband’s gross wages showed modest annual increases. During the same time period, the husband’s income taxes were never more than $8,200.
In 2014, the year that the wife filed for divorce, the Husband sent a $20,000 estimated tax payment to the IRS. This unnecessary payment, plus some ordi- nary excess withholding, resulted in an overpayment of about $27,000 in 2014. The husband received a refund of $3,000, leaving $24,000 to apply to the following year’s (2015) taxes.
In 2015, the husband increased his withholding, adding about $16,000 in overpayments to the IRS. After filing his 2015 tax return, the husband had almost $40,000 in refunds available at the IRS, but not requested.
In 2016, the husband again over-withheld his (W-2) federal income taxes, adding an additional $17,000, to his IRS “savings account.” The funds secreted in the US Treasury totaled over $57,000 at the end of 2016 – and some portion of those funds were marital.

Pitfalls for the Abuser

It would seem logical that the IRS should be happy when taxpayers overpay or withhold excess taxes. However, the tax code prohibits such behavior. The code identifies certain practices as frivolous, and applies penalties for filing frivolous tax returns. The Internal Revenue Code section 6702(a) lists positions (taken when filing a tax return) that constitute frivolous filing. Included in paragraph (22):
“…an amount of withheld income tax or other tax that is obviously falsebecause it exceeds the taxpayer’s income as reported on the return or is disproportionately high in compari- son with the income reported on the return…” The penalty for filing a frivolous tax return is $5,000. Of course, it is safe to say that most judges do not look kindly on litigants who engage in such dishonest practices.

Conclusion

Just because your client is a W-2 employee does not mean that you don’t need a forensic accountant on your team.

With an MBA from MIT and a Masters in Accounting, Harriett Fox (CPA) specializes in com- plex financial analyses in divorce proceedings. She has served as an expert witness in numerous cases, and she is a Collaborative Financial Professional. www.harriettfoxcpa.com

Related Article

How Do You Find Hidden Assets?

Suggestions for how to go about locating hidden assets: questions to ask, places to look and things to look for.

www.familylawyermagazine.com/
articles/find-hidden-assets

As a Certified Public Accountant with many years of experience, Harriett Fox provides attorneys, divorcing couples and businesses with forensic accounting services. As a collaborative financial professional, Harriett works with divorce attorneys and helps couples to settle out of court.

Harriett was born and raised in Newton MA, a suburb of Boston. She holds an MBA from the Sloan School of Management at MIT, and a Master of Accounting from FIU. She has worked in positions at Fortune 500 companies, family owned businesses, and international, national and local accounting firms. She was recently appointed to the Florida Bar Grievance Committee – Eleventh Judicial Circuit.

Harriett has had her own forensic accounting practice in Coconut Grove for over 10 years. She is devoted to minimizing the damage caused by divorce by helping families navigate and communicate using the collaborative divorce process

harriettfox@alum.mit.edu
T: 305.495.2179
www.harriettfoxcpa.com
Facebook | Linkedin | Youtube

The post HIDING INCOME & ASSETS at the IRS appeared first on Harriett fox cpa.

You probably became a lawyer for the exact opposite reasons that I became a CPA: I could not fathom doing all that reading and writing, and you probably could not fathom dealing with numbers. You did not become an attorney because you wanted to spend the rest of your life crunching numbers – but a lot of the work you do as an attorney requires some knowledge of financial calculations.
Almost every lawsuit includes a financial component. In a divorce, the financial components include valuing marital and non-marital assets and liabilities, determining each spouse’s income, and calculating spousal support (alimony) and child support. There may also be a closely-held business, stock options, or a pension that needs to be valued for inclusion in the mari-tal estate. In non family matters, the financial pieces can include calculating damages for insurance claims, personal injury, wrongful death, and tort actions to name a few.

A Grand Today is Better Than a Grand Next Year

Having $1000 today is better than having $1000 a year from now because you can use that $1,000 to make money between now and next year. If you can earn 10% interest, you will have $1,100 a year from now. Put another way, the value of $1,100 a year from now is equal to $1,000 today. Expressed in financial terms, the present value of $1,100 in one year, with a 10% discount (interest) rate, is $1,000.
In divorces, the horizon is often longer than a year. For illustration purposes, we will use a five-year time- frame in our calculations. Using the same $1,000 today, the following shows the future value of $1,000 at 10% interest.

A Complicated Formula for an Uncomplicated Concept

It is simple to use a mathematical expression to calculate future value. Instead of adding 10% interest each year, the factor of 1.1 is used to multiply the value of $1,000 each year into the future. Calculating the value in 5 years at 10% interest is:
$1,000 x (1.1) x (1.1) x (1.1) x (1.1) x (1.1). or, using exponents from algebra: $1,000 x (1.1)5 Expressed in financial terms: Future Value (FV) = Present Value (PV) x (1 + interest rate (r))number of years (n) or FV = PV x (1 + r) n

Let’s look at an example of a future value calculation. If I buy a $10,000 bond today that earns 10% interest with no payments until maturity, how much will the bond be worth in three years? The formula to calculate the future value is:
FV = PV x (1 + r) n
FV = $10,000 x (1.1)3
FV = $10,000 x 1.33
FV = $13,300
Using this formula, it seems obvi-ous that if the PV (the amount we start with) increases, then the FV will also increase. And, as long as the interest continues to accrue, the longer we hold the bond, the higher the FV of the bond will be. Finally, if the interest rate goes up, we will earn more interest on the initial $10,000, and will, therefore, have a greater FV.

Reversing the Concept

Suppose instead of calculating the FV of a present amount, we want to find the PV of a payment in the future. Instead of multiplying the PV by an interest rate to calculate a FV, we divide the FV by a factor (discount rate) to calculate the PV. The factors are derived from the interest rate. For 10% interest, the factors for the first five years are as follows: Since the formula for FV (from earlier) is:
FV = PV x (1 + r) n
Using basic algebra, the PV is then:
PV = FV / (1 + r) n
Let’s look at an example of a present value calculation. Suppose there is a marital certificate of deposit (CD), earning 10% interest, that matures in three years. It can be retitled from joint ownership to single ownership, but it cannot be redeemed without a large penalty. Rather than wait for the CD to mature in three years so the couple can divide the proceeds, one party will take the CD in exchange for some other marital asset. To ensure a fair exchange, we have to calculate what the value is today on a CD that matures in three years. The formula to calculate the PV is:
PV = FV / (1 + r) n
PV = $10,000 / (1.1)3
PV = $10,000 / 1.33
PV = $7,518 (rounded)

Annual Payments in the Future

So far, we have presented cases that are for single payments in the future. What if there are annual payments? How can you find the PV of multiple future payments? The basic calculation is the same. The PV of each year’s payment is calculated and summed to find the PV of the stream of payments. Suppose there are five annual payments of $1,000. Each year’s payment would be divided by the factor for that year. The calculation looks like this: The PV of the five-year stream of payments is the sum of each of the values, or a total of $3,793 for the five annual payments of $1,000.

The Magic is in the Assumptions

Now that we know the formula for calculating PV, what could be contro- versial about the calculations? Let’s see what happens when the basic variables are changed. The vari-ables are:
PV – present value
FV – future value
r – interest rate
n – number of years in the future
Any one of the variables can be calculated when the other three values are known. The interest rate can be calculated if you know the PV, FV, and number of years. The number of years can be calculated knowing the PV, FV, and interest rate. But we’re concerned with the PV calculation and how its factors impact the outcome. Let’s use the example from the single payment PV calculation, changing the variables one at a time.

To review: we have to calculate what the value is today, on a 10% CD that matures in 3 years. This is the calcula-tion from above.
PV = FV / (1 + r) n
PV = $10,000 / (1.1)3
PV = $10,000 / 1.33
PV = $7,518 (rounded)
Now what happens when we change the variables?

Double the future value:
If the FV is $20,000 instead of $10,000, then the PV becomes:
PV = $20,000 / (1.1)3
PV = $20,000 / 1.33
PV = $15,036 (rounded)
As expected, the PV increases proportionately as the FV increases. When we double the FV, the PV also doubles.

Double the number of years:
If the FV stays at $10,000 and the number of years is 6 instead of 3, what is the PV?
PV = $10,000 / (1.1)6
PV = $10,000 / 1.77
PV = $5,649 (rounded)
The PV of $10,000 is less the further into the future we go. But it is not proportional. In other words, by doubling the time horizon, the PV was not reduced by half.

Double the interest rate:
If the FV is $10,000 and the number of years is 3, what if the interest rate is 20% instead of 10%?
PV = $10,000 / (1.2)3
PV = $10,000 / 1.728
PV = $5,787 (rounded)

The PV of $10,000 is less than the resulting $7,518 from the original scenario. But it is not proportional. In other words, by doubling the interest rate, the PV was not reduced by half.

Halve the interest rate:
If the FV is $10,000 and the number of years is 3, what if the interest rate is 5% instead of 10%?
PV = $10,000 / (1.05)3
PV = $10,000 / 1.157
PV = $8,643 (rounded)
The PV of $10,000 is higher than the resulting $7,518 from the original scenario. With a lower interest rate, the resulting PV is higher, but again, not proportionately.
The explanations contained here are just the tip of the PV iceberg; there are many applications for using PV calculations. Ask your financial profes-sional to explain the elements of the PV calculations used in your cases. You should question the assumptions he/ she is using – especially the interest rate (discount rate), as it has a major effect on the outcome. And you should always
feel confident that your financial profes-sional understands the calculations and isn’t pulling results out of a hat. 

With an MBA from MIT and a Masters in Accounting, Harriett Fox (CPA) specializes in com- plex financial analyses in divorce proceedings. She has served as an expert witness in numerous cases, and she is a Collaborative Financial Professional. www.harriettfoxcpa.com

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Thank you for your interest in Forensic Accounting. I chose this field of practice because it allows me to use my skills to help couples understand and make decisions about the financial aspects of their divorce and the life that is to follow.

Many people think that Forensic Accounting has something to do with death or dead bodies. It doesn’t. Forensic accountants value a couple’s assets and liabilities for equitable distribution, and determine income for alimony and child support purposes.

With over 40 years of experience and with my knowledge of business, the divorce process, and financial matters, I can assist a divorcing couple and their attorneys to understand the financial aspects of their proceedings and settlements. Please call me at 305-495-2179, or email me at harriettfox@alum.mit.edu to schedule a consultation.

Thank you.

What is a Forensic Accountant?

Forensic accounting is a specialty practice area of accounting that involves working with clients and their attorneys on legal matters. As a Forensic Accountant, I collect evidence, primarily in the form of financial and accounting documents, in order to answer financial questions in legal matters. In the case of divorce, I prepare financial affidavits, calculate the parties’ incomes, establish the value of marital assets and liabilities, value closely held businesses, and complete alimony and child support calculations. In many cases, I assist the attorneys in preparing document requests, deposition questions and trial questions. In some cases, I testify in court as an expert witness, and render my opinions to assist the court in reaching better financial decisions.

How is a Forensic Accountant different from all other accountants?

A forensic accountant’s work differs from traditional accountants’ work in many ways.
Traditional accountants prepare financial statements and tax returns in specified
formats. All personal tax returns are filed on the same form – Form 1040. Forensic
accountants are free to tailor their presentations to best explain the issues under
consideration. As a Forensic Accountant, I testify in court as an expert witness.

Traditional accountants are usually called as fact witnesses. Traditional financial accountants and financial statement auditors can sample accounting transactions to make their conclusions. In contrast, forensic accountants typically look at all transactions. Within forensic accounting, we learn that “the devil is in the details.”

What does a Forensic Accountant do in divorces?

In family law, I focus on valuing the marital estate, determining which assets and liabilities may be non-marital, determining the parties’ incomes, and calculating alimony and child support.

To accomplish this, I prepare a financial affidavit for each party, or I use the financial affidavits already prepared. The financial affidavit summarizes the parties’ assets, liabilities, income and expenses. Information comes from volumes of documents from both parties. Typically, three to five years of documents are collected, including:

• Income tax returns
• Bank statements for checking, savings, individual and joint accounts
• Investment account statements including retirement accounts, individual and
  joint accounts
• Credit card account statements, individual and joint accounts
• Debit card transactions, if not included in bank account statements
• Mortgage statements
• Loan statements

For closely held business:

• Tax returns
• Balance sheets, income statements, general ledgers
• Articles of incorporation
• Shareholder/partnership agreements

From these documents, I prepare a set of schedules that show all the marital and non- marital assets and liabilities, and a proposed equitable distribution for discussion. I calculate alimony and child support based on the parties’ incomes and anticipated tax status.

And sometimes, Forensic Accountants are called upon to find hidden assets. In short, as a Forensic Accountant, I make sure that clients and their attorneys have the financial information they need to make informed decisions.

How to choose a Forensic Accountant

In the case of a litigated divorce, it is important that the Forensic Accountant have the necessary credentials to be accepted as an expert witness by the court. It is also helpful if the Forensic Accountant has sufficient experience in family law and understands court proceedings.

What does it mean for a Forensic Accountant to be independent?

Attorneys and accountants are highly respected professionals. They take an oath to practice to the best of their ability and to uncompromisingly represent the best interests of. And that is where the biggest professional difference between attorneys and accountants lies. Attorneys take an oath to zealously represent the best interests of their clients. Accountants take an oath to protect the public trust. Forensic Accountants cannot advocate for their client, but they can advocate for their opinion.

The attorneys’ case theory may change depending on whether the husband or wife is represented. Or whether the “earner” or the “non–earner” is the client.

The accountants’ case theory should not change, no matter who the client is, who the attorney is, or which side is paying the fees.

Often times the most volatile item in a divorce settlement is the valuation of a family business. As an independent Forensic Accountant, my opinion of valuation will not change depending on who owns the business (my client or the other side). And, as an independent Forensic Accountant, I will not agree to produce a predetermined value presented by either party.

What does it mean for a Forensic Accountant to be
neutral?

I like to help people save time, money and energy as they navigate their way through a divorce. That’s why I believe in using a neutral Forensic Accountant.

Let’s face it. There are only so many ways to combine numbers. This is not to simplify or minimize the amount of training and knowledge that is required to do the forensic accounting in a divorce case. But, if each spouse engages a Forensic Accountant, chances are that the two accountants will agree on about 80% of the financial issues. Then the two accountants meet to see if they can hash out the balance of the items. If not, then the remaining 20% will be negotiated, mediated or decided by a judge. Having a neutral forensic accountant at mediation saves fees by having only one, instead of two, accountants presents. Often times, as a neutral Forensic Accountant, I will assist the mediation process by following the mediator and working with both parties.

When I am a neutral Forensic Accountant working equally for both parties, then the accounting fees are reduced almost by half. Usually discovery is more transparent and faster because there is less tendency to withhold information.

When should you hire a forensic accountant?

Not only because I am one, but because the financial issues in divorce are becoming more complex, I believe that most divorces should have a Forensic Accountant involved. I have seen cases where “W-2 employees” have hidden assets and income at the IRS. Many times, albeit with the best of intentions, attorneys’ calculations for future income (for alimony and child support), use the wrong tax bracket. Sometimes, the martial portion of pension and retirement funds are improperly calculated.

As for deciding at what point in the divorce you should hire your Forensic Accountant, unequivocally at the earliest possible time. Too often, I am called after the discovery date has expired, and some relevant documents were not requested. When involved at the beginning of a case, my expertise can be used throughout the proceedings.

What about the cost?

The cost of divorce can be staggering. Decisions made will impact your life and your children’s lives for a very long time. Even if the case seems simple – W-2 employees, a house, a few investment accounts, a few retirement accounts, a couple of cars and some jewelry – it is important that the assets and liabilities be properly valued, and the income properly calculated. These activities should cost a few thousand dollars (not tens of thousands). When there are extensive properties, pre- or non-marital items, or a closely held business, the costs could be higher. But it is always worth asking: should I pay a little more to make sure it’s right? I think so, because it is the rest of your life.

If you are a family lawyer or a party in a divorce or an impending divorce, engaging the services of a forensic accountant—

Call Harriett Fox at 305-495-2179 today, or email her at harriettfox@alum.mit.edu

As a Certified Public Accountant with many years of experience, Harriett Fox provides attorneys, divorcing couples and businesses with forensic accounting services. As a collaborative financial professional, Harriett works with divorce attorneys and helps couples to settle out of court.

Harriett was born and raised in Newton MA, a suburb of Boston. She holds an MBA from the Sloan School of Management at MIT, and a Master of Accounting from FIU. She has worked in positions at Fortune 500 companies, family owned businesses, and international, national and local accounting firms. She was recently appointed to the Florida Bar Grievance Committee – Eleventh Judicial Circuit.

Harriett has had her own forensic accounting practice in Coconut Grove for over 10 years. She is devoted to minimizing the damage caused by divorce by helping families navigate and communicate using the collaborative divorce process.

harriettfox@alum.mit.edu
T: 305.495.2179
www.harriettfoxcpa.com
Facebook | Linkedin | Youtube

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Infidelity, or cheating, is the act of being unfaithful to a spouse or other partner. It typically means engaging in sexual or romantic relations with a person other than one’s significant other. Various types of infidelity that involve other people include physical infidelity, emotional infidelity, and cyber infidelity, among others.  

So, it may be surprising that not all infidelity includes another person outside of the marriage or relationship. I’m referring to financial infidelity.  

What it is 

Financial infidelity is defined as, “Spending money, possessing credit or credit cards, holding secret accounts or stashes of money, borrowing money, or otherwise incurring debt, without the knowledge of one’s spouse, partner, or significant other.” In other words, one person is not being fully transparent about their finances, which puts the whole family at risk.  

One form of financial infidelity, and the one that most people assume to be the case, is hiding assets. In some states, and under certain circumstances, some assets may have and retain a non-marital status. While these assets might be totally legitimate, they may be hidden because one spouse does not want the other to have access in the event of a divorce. In some cases, this could be an indication of “divorce planning” – an attempt to tip the balance in dividing assets.  

Another common way people engage in financial infidelity is by hiding debt. This form of financial infidelity is the flip side of hiding assets. While the owner of the hidden assets aims to conceal them during a divorce, those with hidden debt aim to have the debt classified as marital, thereby including it in the marital estate. This means that the party who did not incur the debt and did not know about the debt will have to help pay it off.  

Another less recognized form of financial infidelity occurs by misleading one’s spouse about the sources and amounts of income. In divorces, especially for business owners, the “paying” spouse (the one who will be paying spousal support and child support) can develop a case of RAIDS – Recently Acquired Income Deficiency Syndrome. This is a claim that the business is down, and the income isn’t there for the support requested.  

51% 

Studies have shown that millennials are more likely to engage in financial infidelity. CreditCards.com reports that roughly 51% of millennials admit to concealing some sort of financial information from their spouses. What’s more, the financial stress put on by the COVID-19 pandemic only exacerbated these issues. Now that the pandemic seems to be abating, we are slowly returning to our normal lives. This is an opportunity to start fresh and be transparent with our partner about finances that affect the marriage’s and the family’s stability. 

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Have you wondered what forensic accountants do and why they are hired in legal cases? Since most litigation has a financial component, forensic accountants are retained to use their expertise to form opinions on the financial matters of the case. They are hired to value closely-held businesses, determine loss damages, identify diverted assets and assist couples in navigating the financial aspects of divorce. What does the forensic accountant do in a divorce? Who hires them? And when should one hire the financial expert?

What we do 

Forensic accountants perform many functions in family law cases. Some of these include:

• valuing marital assets and liabilities:
  • bank accounts
  • investment accounts
  • closely held businesses
  • real estate, including the marital residence
  • retirements accounts
  • vehicles
  • other assets
  • mortgage debt
  • credit card debt
  • auto loans
  • student loans
  • other liabilities
• determining which assets and liabilities may be marital or non-marital
• preparing a plan for distributing assets and liabilities between the parties
• calculating each party’s income
• determining the appropriate spousal support (alimony) and child support
• assisting in preparing financial affidavits
• in some cases, identifying dissipated or hidden assets

Often, the goal in family law cases is to avoid going to trial. Litigation is expensive, time consuming, and it puts the family’s future in the hands of a Judge who, while well versed in the law, does not know each family and their specific needs. Many cases are directed to mediation by the family court judges. In mediation, the couple can craft a settlement that is best for the family. Forensic accountants often participate in and assist in settlement negotiations. They will attend mediation sessions, and assist in settling the financial issues. 

Who hires us 

The forensic accountant’s financial relationship is with the client. There is a retainer agreement, separate from the attorney’s agreement. The attorney directs the case, and the forensic accountant is an expert supporting the litigation. 

Either party can hire a forensic accountant, or the parties can agree to share an expert. While an attorney’s responsibility is to represent their client’s interest, the CPA’s responsibility is to the public trust.  If each party engages their own forensic accountant, the two accountants will usually agree on about 80% of the issues. The other 20% would be subject to the expert’s opinion. 

The couples can save a lot of money and can expedite the divorce process by sharing a financial expert.  The forensic accountant can present the 80% of the issues that are in agreement, and present the parties’ differences for negotiation.

When to call 

Does every divorce need a forensic accountant? If you are reading to this point, you probably need one. 

For a couple where each has a job (W-2 employees), no children, and limited marital assets, they do not need a forensic accountant. But if there are children, if spousal support (alimony) is expected, if there are retirement accounts, jointly held real estate, banking and investment accounts, a joint debt like a mortgage, credit cards, automobile loans, then a forensic accountant is needed.

When you decide to hire a forensic accountant, do it sooner, rather than later. The forensic accountant can provide valuable assistance in preparing financial affidavits, developing document requests, and identifying areas of special interest in the case.

Finances are a central component of divorce cases. Forensic accountants can simplify and clarify complex financial issues. They can help facilitate settlement negotiations and are trusted, expert witnesses.

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Not everyone understands what I mean when I say I’m a forensic accountant. “So, you work with numbers and finance?” Yes, but not like a traditional accountant. “Are you involved with crime scene investigations?” “Do you look for hidden money?” While that could be the case, here we’ll address forensic accounting in divorce proceedings. 

There are plenty of misconceptions like this; many times, people think my responsibilities get lumped into traditional accounting. Here are a few key distinctions to understand when comparing these two types of accountants. 

Courtroom Testimonies

Traditional accountants and forensic accountants can both play a pivotal role in a courtroom setting. However, they are called upon to do different things. 

Traditional accountants are typically put on the stand as fact witnesses. This means that they are privy to certain relevant information, and one side will call upon them to testify to that. A forensic accountant on the other hand, is often called as an expert witness. In divorces, the forensic accountant determines values of assets and liabilities, and what the parties’ incomes and expenses are. The forensic accountant is trusted by the judge to give his or her opinion on these matters. 

Financial Documents

Both forensic accountants and traditional accountants present financial information. The way they are presented, however, is where the differences lie. 

Traditional accountants prepare financial information in specified formats. A personal tax return is filed in Form 1040, for example. A forensic accountant divorce miami has more freedom to tailor financial schedules in a way that best explains the topic at hand. This facilitates divorce proceedings, as our presentations are designed to clarify complex financial information.  

Distant Relatives

At the core, both traditional and forensic accountants are dealing with financial issues. How these two professions process and present the numbers is where they diverge. As a forensic accountant, I make sure that people going through a divorce know their current financial situation and what they can expect in the future. The importance of this knowledge cannot be overstated. 

If you are considering a divorce or are in the middle of one, contact a forensic account to go over your finances and start preparing for your future. 

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There are many different types of cases within the family law sphere. For example, there are divorce cases, child custody disputes, domestic violence charges, protection from abuse orders (PFA’s), paternity claims, and many other scenarios that can arise. That’s why it is very important to know how to choose the right attorney when you’ve decided to take legal action within this area. Here is some useful information on how to do just that:

1) Consult with several divorce lawyers

There are a number of family law attorneys who offer free consultations. This means that you won’t have to spend any money on this step, but instead use it to better understand your case and prepare for the best possible outcome. However, these consultations aren’t necessarily set in stone either because there are some cases when they wouldn’t be available. It all depends on how busy the lawyer’s schedule is at that particular time or if they’re willing to offer you their expert advice at no charge.

2) Speak with friends and family who have dealt with a similar case

Make sure that the divorce attorney is experienced in divorce cases similar to yours (e.g., your spouse’s true income should be known by a divorce lawyer).  By gathering as much information about your case as you can, you will have a better chance of finding the perfect lawyer for your needs. Consult with family members or friends who have already dealt with divorce cases just like yours because they are the people who know what to expect from this process.

3) Obtain professional references when possible

Don’t hire the divorce lawyer that has been advertised on television or in a newspaper flyer; instead, request recommendations from family members and friends for their best divorce lawyers.  Be sure to check if the divorce lawyer you’re interested in has received any awards from other professionals who know his work. This will serve as an indication of the quality of service that this person provides.

4) Narrow down your search by checking online for reviews or client testimonials

 Make sure that the divorce attorney you choose has a professional webpage with details on his education and experience. It’s also advisable to read online reviews which can be found on many different sites including Yelp, Superpages, and Google+ Local. This will allow you to know what other customers think about this person so you can determine if he is the best person for your case.

If you are not able to get any recommendations, search online for divorce lawyers in your area; read the profiles of divorce attorneys posted on multiple websites; make sure to look at their biographies (which should include years of experience). Online reviews can also make it easier to search for an attorney in different areas. This way, if you’re looking for someone more local, you can search through reviews of attorneys based on their location and then choose the one that seems like the best fit for your situation.

5) Look through each attorney’s website for necessary information

Before choosing a divorce attorney, check his or her review/rating on multiple websites as well as testimonials from previous clients; make sure to read all reviews carefully! The main goal of your search is to find a divorce attorney that will work for you and be able to offer expert legal help. Be sure that you have all the information about their fees, payment options, contact details, and experience in this field before making any decisions.

6) Speak with local lawyers

Your city will probably have many different websites which feature lists of family law attorneys. This is an excellent idea because all of them will offer free consultations so you don’t have to worry about filing fees and other hidden charges that might come up along the way. Hiring a local attorney is not mandatory but it certainly does make things easier for everyone involved, especially if issues regarding physical custody arise down the road.  Make sure your lawyer is familiar with the courts that will be hearing your case. If at all possible, hire lawyers who practice primarily in one county or just a few counties so that they can become highly proficient with local judges, procedures and customs. Most importantly, make sure you are working with lawyers specializing in your state’s court system (i.e., whether it’s a federal or state district) as well as pairing up with attorneys experienced in the laws of your particular state if divorce occurs across state lines (most don’t).

7) Establish the right budget for your case and find out what services are covered in this price range

Beware of divorce attorneys who ask for money upfront. You should not pay divorce attorneys out of pocket before they have completed their job for you; divorce is an expensive enough process without having to pay swaths of cash before any actual work has been done. If an attorney requires a large retainer fee, request a detailed listing of fees before retaining him or her as your divorce lawyer because legal representation should never cost you more money than you can afford!

Finally, verify whether or not your family law attorney is a member of an organization such as the American Academy of Matrimonial Lawyers (AAML).  These societies only accept experienced attorneys who meet the highest standards of training and ethics. By choosing to work with AAML-affiliated divorce lawyers, you can be sure that your case is in capable hands while simultaneously making a meaningful contribution to the community.

These are all important steps when choosing a family lawyer!

Therefore, before moving forward with the process, think about or ask your divorce attorney what your legal needs are and plan ahead accordingly. The more effort you put into finding the right divorce attorney near me, the better chance you’ll have of obtaining long-term success within the matter.

This is just a shortlist of things that can be done when trying to find the best divorce lawyers for your situation; there are, of course, other steps that could also be helpful in this process. Be sure to consider all options and choose one carefully because this decision will affect the outcome of your case.

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Family law can be complex, interweaving your life with many other legal aspects. It is critical that you work with the right professionals to ease the divorce process for you.

If you are in a family law or divorce dispute, you may need the support of the following professionals:

Divorce Attorney

Choosing the right divorce lawyer could perhaps be the most important step in a divorce dispute. Like in all professions, there are good ones, and then there are bad ones. You will need to do some research to find a lawyer who is the right fit for you.

For starters, you must find a good lawyer specializing in family law. The lawyer you choose should have several years of experience practicing family law. If they have mentored other family lawyers or published books and other legal articles, that is an added bonus.

You should also try and look for a lawyer who is also a skilled negotiator. Being able to resolve your dispute without a court battle can save a lot of time and money. You will also be able to avoid a lot of stress that comes with court proceedings.

When selecting the right lawyer, you need to choose someone who is firm yet reasonable. You want someone who does not crumble at the first hurdle. Also, you want someone who can advise you when to settle instead of dragging the case on and on.

Avoid any conflict of interest when choosing a divorce lawyer. You cannot hire your spouse’s lawyer or any member of your spouse’s family to represent you.

Divorce Mediator

Mediation involves a third-party divorce mediator who helps you and your spouse work out the terms of your divorce and live successful lives apart. A mediator encourages open but structured discussions around parenting arrangements, division of assets, and support payments. Divorce mediation can take some of the stress out of the divorce process and cause less emotional damage. Many courts require the couple to go to mediation before the court will hear the case. However, it may not be the ideal solution in all divorce cases.

Mediators are neutral and help you and your spouse agree on issues such as parenting arrangements and property division. They do not offer legal advice or make the decisions for you. Instead, they serve as facilitators to help spouses figure out what is best for their situation.

Many family law practitioners are also trained mediators. If you are looking for a divorce mediator, you may check with your lawyer specializing in family law.

Accountant and Forensic Accountant

A Certified Public Accountant often performs accounting services and prepares tax returns for individuals, corporations, and other business entities. They also provide business, accounting and tax advice to their clients. 

Forensic accountants combine their accounting knowledge with investigative skills to conduct an examination into the finances of an individual or business. The forensic accountant works closely with the divorce attorney and is often called upon to participate in various aspects of the process.  In divorces, a forensic accountant’s objective is to determine each party’s income for spousal support (alimony) and child support; and to value the marital assets and liabilities for equitable distribution purposes. Specifically, the forensic accountant will value assets such as the family business, stock options, pension plans, and company shares. This is especially important in high-net-worth cases. 

Sometimes, forensic accountants are asked to determine whether there are missing assets and where they might have gone and also help you recover it.

If you suspect that your spouse is hiding assets, hiring a forensic accountant who also practices commercial litigation Miami may prove very useful. 

Appraiser

When it comes to asset division in a divorce case, couples may not know the exact value of their tangible property. Personal property may include a large number of things, including cars, jewelry, artwork, furniture, and other collectibles.

With the help of a qualified appraiser, you can establish the value of your personal property so that it may be properly divided during the divorce proceedings.

Real Estate professionals

Depending on their financial condition and the division of households, divorcing couples often need to sell their marital home. Having to deal with the housing market in the midst of an emotionally stressful divorce proceeding only adds to the stress. Real estate professionals who are familiar with family law and divorce issues can be very helpful in the processing of selling or purchasing a home. They can help ease the tension between spouses by speaking with both of them, eliminating the communication gap and differences in opinion.

Therapists, Evaluators, and Parenting professionals

Disputes around issues such as co-parenting, custody arrangements, and finances could be so emotionally charged to the extent that they cloud your judgment. In such cases, the court may sometimes choose to appoint or ask the parties to engage the services of various professionals to help them resolve these complex issues.

Therapists and other mental health professionals can help you manage anxiety, stress, depression, and other psychological issues that may result from or get aggravated by your current situation.

The court may also appoint evaluators or experts to conduct evaluations into a number of issues such as substance abuse, custody, parenting issues, risk factors, and more. Sometimes, you may need to hire such professionals yourself. 

A divorce proceeding can be an extremely stressful time, especially for children who often don’t know what to make of the situation. In such cases parenting professionals such as parenting supervisors, guardians ad litem, parent coordinators, custody and parenting time mediators, and parenting skills program providers may also be needed to ensure that the family environment remains as stable as possible for children.

Family litigation support involves many professionals from different walks of life who can ease the divorce process for you. Each professional has a special role to play in the divorce process to minimize the stress and emotional turmoil a divorce can have on the entire family. 

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Divorce, no matter how smoothly it goes, is a complicated process. There are many moving parts throughout the proceedings, and plenty of things to consider as you prepare for a separation. One particularly pressing factor to consider is how you can afford to be divorced.

Logistics

Divorces themselves cost money, but everyone knows that. You must budget appropriately for legal expenses that can accumulate, especially if the process becomes overly contentious and, therefore, takes longer than expected. There are other details to consider, and these questions, sadly, are sometimes overlooked by soon-to-be divorcees.

Running a household on one income instead of two presents challenges that many people are not prepared to face. A recently divorced person, presumably, will be living on their own for a time during and/or after the divorce. That person must look candidly at his or her financial standing and determine if they are able to live comfortably on their own without a second income to support the household.

Let us also consider the ongoing pandemic which, while abating, still has unanswered questions. Is it wise right now to move to a new house/neighborhood/city/etc.? Though we have learned much about how to avoid and combat COVID-19, it is important to consider the potential impact it could have on your life as a newly divorced person.

Children are a major consideration in divorce, and child support is a key element of most settlements. When contemplating a divorce, enumerate all the child expenses to determine to what extent they can be covered, if child support payments are interrupted. It is important to be prepared for life’s changes and challenges, should the paying spouse not be able to meet their support obligations.

Plan Accordingly

Divorce is often the best solution for a distressed marriage. There are many issues to consider before petitions are filed, however. It is important to assess your current financial position, and to plan for financial impacts going forward. These include the divorce process, as well as your future financial needs. Since the divorce will create a blueprint for your future, you need to hire competent legal and financial professionals to guide you. They can help you answer the question “How can I afford to be divorced?”

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