Most people realize that they should have an attorney on their team when going through a divorce. But did you know that you should often also have a CPA (certified public accountant) on your side during this time?
There are many situations in which a CPA can help you get the divorce decree and settlement that you deserve. What are some of these times? Here are five of the most common.
- You Suspect Hidden Assets
Do you have reason to believe that your spouse is hiding significant assets — money, property, investments, or other accounts — to avoid losing them in the divorce? Then you need an experienced attorney as well as an accountant.
A CPA will know how to search through tax returns, expense records, and business documents to find evidence of hidden assets. If you opt for a divorce attorney who is also a CPA, they’ll know what flags to look for as well as how to follow up using all available legal means.
- A Business Is Involved
Businesses make divorce more complicated in a variety of ways. The business's value and future earning potential must be factored into the divorce agreement. Even if a divorce is amicable and both parties want to negotiate a fair outcome for all, business assets are much more complex than regular wages and salary. An accountant should always be involved.
There are many questions you will need to work out about the business. Did you put work into the business too? How can you put a monetary value on your contributions? Will a joint business be divided or dismantled? Will you continue to own it together? If so, what systems or protections can you put into written contracts to ensure smooth cooperation?
- You Need to Understand Tax Implications
You probably aren't thinking about taxes during your divorce, but they can have a huge impact on your finances for years to come.
Many couples split retirement accounts, for instance. You'll need to know the rules about how you must (or must not) withdraw funds in order to avoid a big tax bite. The recent TCJA tax law also changed how alimony affects taxable income both for the payer and payee. Even something as common as splitting the marital home could come with a capital gains tax if it is not handled correctly.
- There Are Unusual Assets
Will you divide up unique or hard-to-quantify assets? This might include such intangible things as copyrights to a published work, music rights, or the value of land with natural assets. Unusual assets involve many variables, so valuing them for the future is often a challenge.
- You Don't Have Experience With Finance
Some spouses let their husband or wife handle the majority of financial decisions during their relationship. This may have been your preference, or your future ex-spouse may have had a controlling manner or even ulterior motives. Whatever the reason, if you find yourself unsure about many aspects of handling your own finances, hire a professional to help you negotiate.
You should consult with a CPA about how to figure your own ability to earn a sufficient living as well as how to calculate expenses for your post-divorce life. If children are involved, you will also need help calculating how much child support is both reasonable and necessary for their welfare.
Does your divorce fit into one of these common circumstances that make a CPA one of your biggest assets during the process? If so — or if you're not sure — start by consulting with the Law Office of Greg Quimby, P.C. Our lead attorney has both a CPA and an MBA in finance, so we can help you navigate the financial aspects of your lawsuit.