Financial Discovery in Divorce

Since California is a community property state, it means that "everything you purchase during your marriage belongs to both of you (spouse/partner)." Of course, there are certain exceptions and rules, such as prenuptial or postnuptial agreements, and many twists to the above statement, but this article's intention is to clarify what happens to individuals when they undergo a divorce process.

Financial discovery is another beast you need to tame if you want the best results. The biggest and most important part of a divorce procedure (second to child support) is the financial discovery. Many lawyers treat this part of the divorce proceedings in the same way that vampires treat garlic. Attorneys either don't want to take on such prolonged cases or they don't want to spend the money for the research and investigations to complete the divorce proceedings--this is due in part because they can't analyze the accounting records. There are a number of computer programs that can help you avoid that problem, but if you don't have any basic accounting experience, you won't be able to understand the programs!

Forensic accounting doesn't revolve solely around numbers but also provides text about those numbers. Lawyers do not want to be held responsible if those numbers are not beneficial to their client. In situations such as these, it's important to have someone that's not only an attorney but an individual that helps to protect clients against such financial bumps. But, how many lawyers out there know accounting and what an accounting firm must provide you with? Numbers are not the only thing that an expert must give you. Other information includes:

1) The valuation of business interests;

2) The valuation time that spouses spend on the business or at home raising kids and having a home office;

3) Whether or not a stipulated date of the valuation took place;

4) The measure of value and the methodology that was used;

5) The replacement value of the Owner's Services (market value of the services that spouses contributed to the business during marriage);

6) How the income of each party was determined;

7) The self-employment, healthcare benefits;

8) Calculations of the cost of living;

9) Tax returns in your possession that were used in your evaluation; and,

10) Methods of Tracing of commingled funds.

I've seen various cases lost simply because lawyers either refuse or don't have the expertise to play the game of number-and-statistics "modus operandi". Let me direct your attention to the articles published in Forbes magazine about how your significant other can hide hide their assets from you, so that when post-nuptial agreements and income and expense declarations come into play, you may the one left paying them rather than the other way around. What you need is to trace the paperwork left behind your soon-to-be-ex as well as any attempts they make to cover assets in their efforts to "live a free and wealthy life" once the divorce is finalized.