“I am not certain my lawyer has a good handle on the financial aspects of divorce. My spouse owns a business and property; I’m not convinced I’m getting my fair share. What should I do?”
This is a common situation, as many good divorce attorneys are trained in divorce law and strategy but may not be trained to value businesses and/or assess the true income or cash flow derived from certain properties or closely-held businesses. The most critical initial piece of financial information that can illustrate the financial reserves available is the case information statement (CIS). This document purports to show what the family spends and what its cash flow income is. If you believe that your attorney does not fully comprehend that situation, or that the CIS is not accurate, we suggest a very thorough review of the income/net worth and budget sections of the CIS with him/her in a non-threatening manner. Thereafter, I would suggest that you ask him for the names of a few good local forensic accountants/business evaluators who regularly do matrimonial work and perhaps with whom he has worked in the past. Many state societies of CPAs have directories of CPAs who do this kind of work, usually under the heading of litigation support services. Be prepared, however, to hear that there may not be the amount of money that you believe exists — or worse, for perfectly valid reasons, you may not necessarily be entitled to more of it.
You might also suggest that you would like to meet with the forensic accountant/business evaluator either together (or initially alone) to discuss your spouse’s financial situation. Since these services can become expensive, a fee range should be discussed to cover the expected costs to possibly value your spouse’s business and/or properties and income/cash flow. Once a comfort level regarding all of the above is established, you and/or your attorney should then bring him on board. This will usually necessitate a retainer and engagement letter, as a “consultant” or even an “expert” to assist both of you in valuing the business for marital distribution purposes and establishing the true economic income and cash flow derived from the spouse’s business for support purposes.
Laurence G. Thoma, CPA, is an accountant, lawyer, and certified fraud examiner practicing at Withum Smith and Brown in Red Bank, NJ. In his 34-year career, he has served as an instructor at the American Academy of Matrimonial Lawyers and the New Jersey Judicial College.