Marital dissolution, or divorce, can be a complicated and emotional process that can impact both parties involved, their children, and their finances. A financial expert can be a valuable asset during this process to help navigate the financial aspects of divorce and ensure a fair and equitable settlement.
Working with Your Legal Team
During marital dissolution, it makes sense to have financial experts work closely with your legal team. CPAs specializing in martial dissolution can provide expertise on complex financial matters and assist in the development of legal strategies that support their client’s financial interests.
Determining Assets, Debts and Income
During the early stages of the divorce process, financial experts can help clarify the parties’ current financial situation. The CPA firm can help gather financial documents—such as bank statements, tax returns, and investment portfolios—and analyze them to determine the assets, debts, and income of both you and your spouse.
This is particularly important in cases where one spouse may have been the primary breadwinner, and the other may not have a clear understanding of the family’s finances. It can be helpful to have specialized CPAs provide guidance on how to interpret and use this vital information.
When it comes to marital dissolution, property division can be one of the most complicated and contentious issues.
A professional property division analysis by a financial expert can help identify which assets are considered marital property and which are separate property. This is important because marital property is subject to equitable distribution, while separate property is not.
Additionally, investment and retirement accounts can be complex, and tax affecting them is necessary to ensure an equitable distribution.
The analysis considers various factors, including:
- Value of the assets
- Length of the marriage
- Contributions of each spouse
- Tax implications of dividing the assets.
By using a professional property division analysis, investment and retirement accounts can be appropriately valued, and equitable distribution can be achieved.
Maintenance and Child Support
During the process of divorce, valuation services are an essential component of determining fair and equitable maintenance and child support payments in divorce cases. A professional valuation by qualified financial experts can provide an accurate and comprehensive valuation of a business or other assets that need to be divided between the parties.
A cash flow analysis is also conducted to determine each party’s income and expenses, which is necessary for calculating maintenance and child support payments. This analysis considers factors such as income, expenses, assets, and liabilities to provide a fair and accurate determination of each party’s financial situation.
Financial experts can also advise on the tax implications of different support payment scenarios, ensuring that both parties are aware of any potential tax liabilities.
With this information, the appropriate maintenance and child support payments can be calculated, ensuring a fair settlement for both parties. By utilizing valuation services and cash flow analysis, the financial implications of divorce can be minimized, allowing both parties to move forward with their lives.
Financial and Tax Implications of Divorce Settlements
As the legal team works towards a divorce settlement, CPAs experienced in marital dissolution can provide valuable insight into the financial implications of different settlement scenarios. They can help both parties understand the long-term financial impact of their decisions, ensuring that the settlement agreement is in their best financial interests.
Finally, financial experts can testify in court as an expert witness. They can provide expert testimony on the parties’ financial situation and the fairness of the proposed settlement. This can be particularly useful in cases where the parties are unable to reach a mutually agreeable settlement, and the court needs to make a decision.
In conclusion, financial experts can be a valuable asset during the process of marital dissolution. CPAs specializing in marital dissolution can help both parties understand their financial situation, assist in the property division process, determine spousal and child support payments, and provide expert testimony in court.
If you have questions, reach out to us at 314-961-1600 or contact us to discuss your situation.
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John Ernst, CPA, ABV, CFF, brings than 20 years experience in financial valuation and litigation support. He is part of Smith Patrick’s growing advisory and consulting team that provides small businesses and families with consultative service, guidance, and support.
About Smith Patrick CPAs
Smith Patrick CPAs is a boutique, St. Louis-based, CPA firm dedicated to providing personal guidance on taxes, investment advice and financial service to forward-thinking businesses and financially active individuals. For over 30 years, our firm has focused on providing excellent service to business owners and high-net worth families across the country. Investment Advisory Services are offered through Wealth Management, LLC, a Registered Investment Advisor.