High-asset divorces are more complicated than traditional ones merely because of the volume of assets involved. It is not uncommon for high-net-worth individuals to assemble entire divorce teams, complete with PR firms, forensic accountants, and business valuation experts. Aside from a divorce attorney and a CPA, when does it become necessary to add a forensic accountant or a business evaluator to the team?
In this article, we discuss forensic accountants and business evaluators and under what conditions it becomes necessary to add them to your divorce team.
What is a Forensic Accountant?
You’re probably aware of forensic accountants, but you may not know when and why they are hired by individuals to assist in their divorce cases. A forensic accountant’s job is to help a client when they’re in trouble, for example, when the client thinks a top executive is stealing from the company, but that’s not all.
Forensic accountants can be compared to bloodhounds. They are naturally suspicious and can “sniff out” deceitful financial activities, as in a spouse who is trying to hide assets in anticipation of a divorce.
If you’re concerned about the wasteful dissipation of marital assets (your spouse squandering marital assets), or your spouse transferring, hiding, or concealing marital assets to cheat you out of your fair share, a forensic accountant can be an asset to your divorce team.
Forensic accountants can assist with:
- Litigation support
- Business valuation
Why Business Valuation?
Divorce is complicated as it is, but imagine what it’s like when you have a privately-held or family-owned business. Suddenly, the client starts asking questions: Is my business a marital asset? What if my spouse doesn’t work in the business? What if my spouse doesn’t own the business? What if I have a partner who is not my spouse? Will I have to buy my spouse out? What if I started the business before the marriage?
The above questions are only the tip of the iceberg when it comes to discussing the business and how it plays into the divorce. Regardless of a spouse’s level of direct involvement in the building of the business and sweat equity, both spouses usually want their fair piece of the pie. If you have a business, a business valuation will be critical to reaching a fair and equitable solution.
Bottom line: There are many factors that impact how much a company is worth, and no two businesses are identical, especially for divorce purposes. If you own a business, you’ll want a qualified professional to perform a business valuation, someone who understands business valuation and its correlation with New York’s equitable distribution laws, divorce mediation, divorce litigation, and the divorce settlement process.
Going through a divorce is tough. Not knowing how much your business is worth when getting a divorce is even tougher. Contact our firm to discuss adding a valuation expert to your divorce team.