A CPA can provide forensic and/or tax services concerning the identification and division of marital property. While the divorce may be amicable, it can still involve financial matters that can be complex and an accountant can provide valuable support to divorcing individuals and their attorneys in achieving a more equitable settlement. More specifically one might consider involving an accountant in their divorce proceedings for the following reasons:
- To determine the appropriateness of the income reported by either spouse. Often one spouse makes more money than the other and generally, the higher-earning spouse has the incentive to understate their income in an effort to reduce alimony or child support. An analysis of the couple’s lifestyle can be performed to determine if the reported income is consistent with the reported change of net worth.
- To uncover hidden assets. Either spouse may attempt to hide assets that they wish to keep post-divorce.
- To determine the value of a closely held business. One or both of the spouses own a closely held business and having a business valuation performed may be prudent as it can often be the largest asset and subject to equitable distribution. In addition, a forensic examination of the business may be beneficial in determining if any income/assets of the entity have been hidden, transferred, or deferred in an attempt to understate the value of the business.
- To determine income tax implications. Tax implications that may arise include, but not limited to, things such as the transfer of property from one spouse to the other and determining the impact of the divorce on any retirement plans, insurance coverage, etc.
While it is not uncommon for an individual getting a divorce to hand control over to their attorney to handle their matters, due to the emotional exhaustion experienced during a divorce, remember that you are your own biggest advocate, and is important that you stay engaged. Advocating for a CPA to be engaged and have on your team may provide a fairer and more equitable distribution of marital assets. With that said, one should certainly perform a cost-benefit analysis to determine if the expected benefit of said service will exceed the expected benefit.
Talk to an Abacus CPAs professional today about your personal, business, and financial goals. We’ll provide you with better guidance so you can make smarter decisions.
Abacus CPAs LLC has a great team of business, tax, and accounting professionals to help you make better decisions, if you are interested and want to hear more about our services in your divorce proceedings, please call 417-823-7171, or visit our website at www.abacuscpas.com and we are here to serve you and your business.
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