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TIL DIVORCE DO US PART....

In today's society nearly every other person who marries may experience the trauma and frustration of divorce.  Although getting married seemed relatively easy undoing the process can create some emotional and financial hardship.

If divorce seems imminent, the best choice you have is to determine how you can best plan for your future. This means seeking professional help early on to avoid potential tax liabilities and help maintain the same or similar standard of living you enjoyed while married. 

One of the primary reasons for marriage failure is due to financial management.  Whether intentional or due to lack of accountability, couples should attempt to maintain the same standard of living that occurred during their marriage.  But sometimes that is not possible or not made known to one of the spouses.

Because CPA's are trained in analytical procedures, financial statement review, problem solving, and tax law, they are one of the primary sources for assisting couples during the divorce process.  Here are some of the services offered by CPA firms:

• Preparation of standard of living worksheets
• Assistance in preparing interogatories for legal counsel
• Determination of child support
• Determination of alimony or spousal maintenance
• Assistance in allocation of assets between marital and non-marital
• Assistance in determining allocation of marital property to enable payment of child support and maintenance
• Forensic analysis including discovery of unreported income, hidden assets, and tracing personal expenses comingled with business transactions
• Assistance in determining valuation of a closely held business
• Providing testimony as expert wittness during trial

Couples who plan for the inevitable are more likely to incur less expense and stress as a result of the divorce.  Although not always possible, cooperation among both parties enables the CPA to complete his/her report in a shorter period of time.  There are no two divorces the same and therefore making it difficult to determine how long the process will take.  Although each engagement is tailored to the specific needs of the individual the procedure is the same.  For example, one spouse who is not involved in a business activity operated by the other, might suspect that moneys are either going unreported or for personal use.  An investigation by the CPA may discover improper allocation of business and personal expenses but the cost to  pursue the activity might far exceed the benefit realized.  At times, CPA's need to make professional judgment decisions in order to benefit their clients.  A CPA who is able to communicate with their client early in the process will be in a better position to meet their goals and objectives.

Remember; if you wait until after the divorce and the decree is final, the chance of making any corrections or changes is slim to none.  The IRS tax code and District Court are not the same and do not go by the same rules.  So plan your divorce and include a CPA knowledgable about matters incident to the dissolution process.