Litigation & Dispute Resolution

February 5, 2019

Lifestyle / Pay & Need Analysis

This presentation was delivered by Karolina Calhoun, CPA/ABV/CFF at the AICPA 2018 Forensic & Valuation Services Conference.

Learning objectives include:

  • Identify and Classify Assets & Liabilities to include on marital and separate balance sheets:

    • Examine documentation and accuracy of the support

  • Assemble relevant information:

    • Current accounts (bank, brokerage) vs long-term compensation accounts (401k, pensions, etc.)

  • Evaluate monthly budget for each spouse:

    • Compare/contrast spouse's budgets

  • Evaluate the payor's ability to support and the payee's need for support:

    • Lifestyle analysis comes into play here as the historical expenses may be used as a basis for monthly budget, however, depending on the finances, may or may not be supported post-divorce

    • Lifestyle analysis also provides the ability to measure the division of net worth at date of divorce and future net worth accumulation over time

Continue Reading

A Financial Perspective and Overview of Marital vs. Separate Property in Divorce-Part 3
A Financial Perspective and Overview of Marital vs. Separate Property in Divorce

Part 3: Illustrative Examples

Part 3 applies these concepts through two examples which are hypothetical and simplified to illustrate the financial analysis that an expert may perform. The examples do not determine whether an asset or change in value is marital or separate. The applicable law, relevant dates, and facts of each matter govern counsel in that determination.
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Part 2: Valuation, Financial, and Forensic Considerations

In Part 1, we discussed the general distinction between marital and separate property. Part 2 takes a closer look at the valuation, financial, and forensic issues that can complicate the analysis of marital vs. separate property: tracing assets over time, evaluating commingling or potential transmutation, identifying liabilities, and analyzing changes in value. The relevance and treatment of these issues vary depending on jurisdiction and the applicable legal framework.
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The program examines the purpose of buy-sell agreements, key valuation provisions, formula-based and appraisal-based pricing methods, and alternative appraiser structures. It also addresses practical considerations for implementing and updating the valuation process, including timing, costs, funding terms, and appraiser continuity.
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