When Should a Divorce Lawyer Use Income Analysis?
When you’re going through a divorce, there are two overarching concerns in conflict: on the one hand, you want to keep your legal costs down; on the other hand, you want a fair result. If you cut corners during the legal process, you could come out on the short end on issues such as child custody, child support, spousal support and property division. However, if you pull out all the stops, you could run up a lot of unnecessary legal expenses. One example of where you’ve got to do a prudent cost-benefit analysis is when your attorney suggests hiring a financial expert to perform an income analysis.
Many couples don’t need this level of scrutiny applied to their finances. If both spouses earn regular salaries or wages, their tax returns generally provide sufficient data to settle the financial aspects of their divorce. You might want an accountant to crunch some numbers, so you have a solid basis for negotiations, but in-depth forensics would be overkill. However, there are certain situations where it’s important to have a qualified financial expert perform an income analysis:
- Closely held businesses — It is notoriously easy for the owner of a small business or family business, especially one that relies on cash customers, to hide income from a spouse.
- Financial portfolios — It’s important to know how much income is likely to be generated by stocks and bonds to ascertain the value of stock options a spouse might be holding.
- Rental properties — This is another area where it’s very easy to claim losses due to repairs and vacancies, thereby driving down reported income.
The bottom line is the more complex your financial holdings, the greater your need for in-depth financial analysis.
One important advantage of divorce mediation is that you and your spouse can often hire a single, neutral financial expert and share the cost rather than hiring your own experts and litigating the merits of their analyses. This reduces your total expenses by eliminating the need for expert depositions, expert testimony in court, and attorney’s fees for a trial.
To learn how Solutions Divorce Mediation, Inc. can work for you, call us at 1.631.683.8172 or contact our Long Island office online.