If you and your spouse have a high net worth and are facing divorce, you already know your divorce process is likely to be complicated by financial issues. Particularly if you own or have an interest in a business, it may take more than just your divorce attorneys to bring your divorce to a successful resolution. You and your spouse may both be up-to-date on the family finances, or, as is common, one of you may handle the money while the other attends to other family needs. Whatever your situation, your attorney is likely to recommend involving other professionals in your high net worth divorce. Here are some of the professionals you may need to deal with, and what they do:
Financial advisors can achieve a number of goals before, during, and after your divorce. If you are in a high net worth marriage, you and your spouse will likely need to fill out the long form of the Family Law Financial Affidavit. Especially if you have not managed the family finances, this can be an intimidating task. Your divorce attorney may encourage you to work with a financial advisor to ensure that the form is completed thoroughly, accurately, and in a timely manner.
Financial advisors can also help parties and attorneys understand the complex assets in the parties’ investment portfolios. If one spouse is a principal in a private equity firm, holdings may not be liquid and may be difficult to value. A financial advisor can help to ensure that all parties understand the value of marital assets so they can be fairly allocated and divided.
A financial advisor can also help an attorney and their client strategize as to how best to divide assets once their value is understood. Not all assets are created equal; one asset currently worth $100,000 may depreciate, while another with equivalent value might be an income-producing asset that grows in value. Minimizing future tax burden, or calculating the division of a retirement plan are other ways a financial advisor can assist with strategizing during the divorce.
If one party needs help taking over the reins of their finances because they’ve always relied on the other spouse, a financial advisor can help with planning so that assets can be wisely managed and used post-divorce. And if there are post-judgment obligations, such as spousal support or stock options to be sold at a certain point, a financial advisor can offer needed guidance long after the divorce case is closed.
There are various types of financial advisors, but a Certified Divorce Financial Analyst is particularly familiar with issues facing individuals during and after divorce, such as tax and retirement planning, and budgeting for children’s educations
A forensic accountant’s work is suitable for use in court, and forensic accountants are often called into service when there is something questionable in one party’s finances that needs to be interpreted and explained clearly in a divorce trial.
Forensic accountants are often involved when there are concerns that one party has hidden assets in an effort to avoid dividing them in the divorce. There need not be suspected malfeasance to involve a forensic accountant in a divorce, but their services are often helpful in particularly complex situations, such as auditing the finances of a closely-held business that is a marital asset.
Forensic accountants may be involved in both the investigation of complex financial matters in a divorce and at trial, testifying as an expert. They are familiar with courtroom procedures and are skilled at pointing out financial discrepancies that could have an impact on the distribution of assets in a divorce.
Couples that have enjoyed collecting art, classic automobiles, coins or other valuables during their marriage will find themselves needing to divide those assets during a divorce. Spouses may also have accumulated a significant amount of valuable jewelry during a marriage. Particularly for unique items, it is worthwhile to engage an appraiser with expertise regarding the collectibles in question.
Business Valuation Experts
A business or business interest may provide most of a couple’s income. It may also represent a significant portion of the marital estate to be divided. Consequently, valuation of a business in divorce is critically important.
It is common for one spouse to be deeply involved in the business, while the other spouse is involved minimally or not at all. In those cases, the active spouse may assert a proposed value for the business based on their experience, and in the interest of saving the often-considerable expense of an expert. This may seem like a wise way to conserve resources, but it can have catastrophic results
There are a number of different approaches to valuing a business, including an income-based approach, a market-based approach, and an asset-based approach. Depending on the approach taken, and the factors taken into consideration, the values arrived at by competent experts can vary significantly. Agreeing to the value proposed by a spouse, or even the value proposed by a spouse’s expert, could result in the other spouse being shortchanged by tens or hundreds of thousands of dollars. Although business valuation experts are costly, their services should be looked at in the nature of an investment, rather than an expense.
How do you identify which financial experts you need in your divorce, and choose one who is qualified to meet your needs? Begin by hiring an attorney who is experienced in handling high net worth divorces and who has relationships with trustworthy experts. If you have further questions about professionals involved in high net worth divorce cases, please contact Miami divorce attorney Antonio Jimenez to schedule a consultation.