Whenever there is a high-net-worth divorce, one of the key aspects of the legal process is transparency. And while some legal strategists may think that tax returns are a trustworthy tool, sometimes there are assets that require the precision of forensic accounting and lifestyle analysis.
The truth behind closely held businesses
In cases that include self-employed individuals or business owners, the line between personal and professional expenses can easily (and intentionally) blur. This is one of the main reasons why a forensic accountant comes in handy, as they can act as a financial detective, analyzing ledgers to identify important details. For instance, some persons can have personal expenses like luxury travel, vehicle leases, or home utilities that were improperly included in the business accounts in order to lower reported income. By recalculating the true cash flow of a business, there is a strong chance that maintenance and child support will be based on real wealth.
The importance of the marital standard of living
In New York law, there is an emphasis on the concept of marital standard of living when determining spousal maintenance. One way of determining it correctly is through a lifestyle analysis, which can audit a couple’s spending habits. Everything, from credit card statements to club memberships can help define how the couple lived over the final years of the marriage, so a partner with less acquisitive power can maintain a comparable quality of life after their legal separation.
When discovery is necessary
In some cases, a spouse is not transparent about important assets like offshore accounts and real estate valued well below its real worth. This is when the pretrial discovery is useful, with legal tools like interrogatories and document demands that can unveil economic information that is relevant to the divorce.
A legal separation requires a detailed financial analysis for both spouses. A skilled attorney can suggest strategies like forensic accounting to resolve a complex case.