Divorce attorneys will sometimes need the services of a forensic accountant. In this article, we will look at frequently asked questions about the use of accountants in divorce cases and provide you with informative answers. Please don’t hesitate to contact our law firm for a free initial consultation. Whether you are already going through a divorce or considering one, our O.C. divorce attorneys can get your case on the right track to a successful conclusion.
Why do divorce attorneys need forensic accountants?
Divorce lawyers use forensic accountants when complex valuation or accounting issues arise. The most common are:
1. Cash flow and income analysis to determine child support: When one or both spouses are self-employed, attorneys will need an income analysis to determine the correct amount of child support. From the perspective of the parent who may be paying support, a forensic accountant can protect against incorrectly high income calculations by the Orange County family court. From that of the parent who seeks support, the forensic accountant can determine whether the other parent is hiding income or running personal expenses through the company.
2. Cash flow and income analysis to determine spousal support: Alimony determinations are similar to child support calculations before trial but, during trial, a forensic accountant can also help put together a marital lifestyle calculation.
3. Business valuation to determine its value and the community versus separate property nature of it: Spouses who own their own businesses or are executives in large companies will often face claims that the business or the partnership interest is community property. Whether a business is community property or separate and what it may be worth will generally require the services of a forensic accountant.
4. Tracing of community or separate property money: When separate property money is brought into a marriage or community and separate property is commingled, forensic accountants are necessary to determine the proper tracing of the money to a separate or community source. This is especially important if separate property has been used to purchase an asset.
When should divorce attorneys hire forensic accountants?
This depends on a client’s budget but our lawyers prefer to hire a forensic accountant early on in the case to avoid too much unnecessary litigation on issues that a forensic accountant can evaluate.
How much do forensic accountants cost?
That depends on the complexity of the work but most forensic accountants require a deposit of $3,000.00 to $5,000.00 to get started. If you are the lower income (or no income) earner, then our divorce attorneys can seek the accounting fees from your spouse.
Do your lawyers have forensic accountants with whom you work?
Yes. We can recommend a forensic accountant to you but, ultimately, the choice to hire one is yours.
When can you tell me whether or not I need a forensic accountant?
Because our attorneys take their time and go into detail about the facts of your divorce case at the initial consultation and, even more so, after you hire us, we will know very early on in your case whether or not you will need a forensic accountant. In some cases, we have the initial interview with the forensic accountant before the initial divorce papers are even filed.
Will the forensic accountant your law firm recommends give me a free consultation?
Yes. The forensic accountant we refer to you will meet with you and will not charge you for the initial consultation. That is because the accountant has a history of trust with us and knows we would only recommend him if we were serious about retaining him.