When it comes to your team during a divorce, many people are aware of the typical players, a paralegal and a lawyer, but many are unaware of other roles and players that may be needed to resolve or try your case at trial. A forensic accountant and a business appraiser may be needed depending on the assets you and your spouse have. Under Florida divorce law, if you and your spouse hold property either personally or jointly, the courts will need to conduct what is called “equitable distribution.” Florida courts conduct this under Florida Statute §61.075, in which the state outlines how marital assets and liabilities will be distributed. See Florida Statute §61.075.
Forensic Accountant
A forensic accountant will use accounting, auditing, and investigative skills to examine a party’s individual finances or business finances to complete equitable distribution. They are Certified Public Accountants that then analyze this information and often testify in court as expert witnesses. See Florida Statute 12.365
When considering whether a client should hire a forensic accountant, attorneys look to see if a matter involves a marital estate with significant debts and/or assets, or if one or both spouses own a business. A forensic accountant can be a valuable person to have on your team especially in a matter in which one party is making efforts to hide their true earnings by using invalid valuations and/or incorrect appraisals.
When determining alimony and child support, forensic accountants will be tasked with determining the spouse’s true income and their ability to pay. In Florida, child support is statutory according to the guidelines and as such, the accountant will assist the attorney in this calculation if needed. See Florida Statute 61.30. A challenge that may come up in your divorce, and commonly leads to the hiring of a forensic accountant, is the valuations of assets, which may include businesses.
Business Appraiser
After a forensic accountant issues their schedules for equitable distribution, child support, and alimony, if there is a business at issue, an appraiser will need to join the team to appraise and set a value for the business. The appraiser will analyze all documents, ledgers, income, expenses, etc., for the business to reach a valuation.
Many businesses subject to a business valuation upon divorce will be valued based on a net book value valuation. What this means is that the value of the business for the purposes of the divorce process will be the value of the company’s assets minus all its liabilities. There are other circumstances in which an enterprise value can be given to the business, which is the price a willing buyer would pay for the business.
The appraiser’s tasks will include determining the appropriate value of a company’s inventory, accounts receivable, and property/equipment line items, as the true fair market value of these items is often different than the depreciated values reported for tax purposes and internal reporting.
The key to swift divorce is who is on your team. It is important to have the necessary players on your side that best suit your needs as every case is unique and no divorce is the same.
If you or someone you know is seeking advice on divorce matters, you can speak with one of our family law attorneys at the Yaffa Family Law Group at 561-276-3880 or visit our website at www.yaffafamilylawgroup.com to schedule your confidential complimentary consultation.