Why use a Financial Expert in a Divorce Case?
Most divorce cases that require the use of a financial expert have a combination of: high-dollar marital assets, complex financial issues, business valuation(s) performed, and/or the need for forensic services such as asset tracing or lifestyle analysis.
How can a Financial Expert assist the Attorney and Client?
In some cases, attorneys require attendance of their financial expert for the entire hearing or particular sessions. Sometimes, the financial expert is required to be available by telephone should issues arise. Having a financial expert involved in cases may be costly. A talented financial expert provides benefits to the client and attorney by aiding in the overall process. Through our experience in working with attorneys and their clients, we have identified four key ways financial experts can be helpful.
Explain complex financial theory in plain English
A financial expert may have performed a business valuation, lifestyle analysis, or alimony or support calculation in a report. An experienced financial expert that can take these highly complex financial issues and use clear and understandable language to explain the results to the client, attorney, and the courts can be of great value. Often, it is during client meetings, discussions with opposing counsel, or mediation where issues can be decided without the judge having to step in.
Defend the Business Valuation
In cases involving ownership of a business, there is often contention around the value of the ownership interest. Both sides may have a valuation expert who provides their opinion on the value and may even disagree with the other expert on key components of the value. A good valuation expert helps to demonstrate and elaborate on the key issues or differences between the valuators and can help “bridge the gap” between the values.
Provide insight into Alimony or Support calculations
While financial experts do not generally determine the amount of alimony or child support, they can assist with preparing calculations and alternatives, thus helping their clients and attorneys to understand the amount, structure, and time value of various proposals. Many times, clients look to understand the various viewpoints, such as “Can I afford to pay this monthly?” from the perspective of the payor or “Can I survive on this amount monthly?” from the perspective of the payee. Assisting with the perspective of the client to the application of the financial decision can be the largest benefit.
Forensic accounting through asset tracing or lifestyle analysis
Working with a good financial expert means they have experience in finding red flags, issues, as well as knowing when to stop. Working with outside financial experts is often perceived as being more objective and should be independent from the outcome of the case. This allows the financial expert to speak candidly and clearly when explaining issues, potential outcomes, and the results of their work.
Conclusion
While working with a financial expert may appear costly, they pale in comparison to the costs of getting poor advice and having to have the work done a second time. Involving a financial expert early in your process can often help to make your case more organized and prepared for mediation or trial.
I’m Gregory M. Clark, MSA, CPA, CVA, MAFF of GMC & Company. I help attorney’s and their clients in litigation matters with business valuation, litigation support, forensic accounting, and consulting. If you have a shareholder dispute, or are going through a divorce and need a business valuation or forensic services, let’s talk! Call us at 219-554-9700 or email us at info@gmcandco.com.
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