Going through a divorce can be one of the most challenging times in a person’s life. Divorce accounting is often complicated and expensive, even if the divorce is not combative.
A collaborative divorce is one in which the couple negotiates the terms of the divorce – usually through mediation – without a hostile and drawn-out court case. Some divorces are marked by both parties trying to hurt the other by contesting everything from splitting the finances to custody of children if any are involved. By contrast, a collaborative divorce shows both parties’ willingness to work together and find resolutions that satisfy both parties. While collaborative divorces are often less stressful than contentious ones, one can still benefit from the advice of a divorce accountant.
The Role of Accounting Experts in Divorce
Whether your divorce is collaborative or hostile, financial experts can advise on many of the issues that come up during a divorce. Examples include:
- Determining whether to liquidate the real estate or whether one party can buy out the other’s interest in the property. If there are multiple properties, a financial expert can advise on how to split these fairly.
- Determining how to best assign ownership of other assets, such as jewelry, artwork, vehicles, and other household items.
- Creating a plan for outstanding debts, including those that each party holds individually and those existing from joint accounts.
- Developing a plan to address any retirement plans and maintenance payments, if applicable.
- Helping both parties to understand the various tax implications of their financial decisions.
A financial expert may be able to help you determine what documentation needs to be completed and submitted to ensure the financial plans are carried out according to the agreement. While it may be tempting to think that both parties can come to an understanding of all of these issues in a collaborative divorce, there are still many benefits to consulting an accounting firm.
Benefits that Divorce Accountants Bring During a Divorce
Another significant benefit of consulting an expert during a divorce is that they can help all parties understand the full scope of their financial decisions and explain the impact of the underlying legal issues. This helps prevent any surprises from popping up after the agreement has been finalized. In addition to helping you understand the immediate implications of financial decisions, accountants can also assist in planning for future needs, which is especially important in cases where maintenance or child support payments must be made.
Beyond that, divorce accountants can often streamline the divorce process and reduce the divorce’s total cost. Accountants will bring well-organized data and supporting documentation to the meetings, ensuring that the information is clear and easy to understand. Ultimately, this often leads to a faster agreement on a plan of action by both parties – which may reduce the attorneys’ fees.
A skilled CPA firm can also give you a full picture of your financial state as a married couple and how benefits – such as retirement, health insurance, and deferred compensation – will change after the divorce. They can also give you an overview of what might happen upon disability, termination from employment, retirement, or death.
Having this type of financial advice upfront helps you reach a more equitable agreement, which usually results in everyone being more satisfied in the long run. This process will help both parties in a collaborative divorce stay amicable. Even in collaborative divorces, if the parties cannot reach an agreement, it can turn hostile quickly.
Consulting with a Divorce Accountant During a Divorce
Divorce accounting firms are not attorneys and cannot provide legal advice. However, they can provide information so that you and your family can make the right decisions during an incredibly stressful time. As a neutral party with no vested interest in the outcome, they can often put things into perspective and help you reach an agreement faster.
Using a divorce accountant can increase the likelihood that a fair agreement is reached, reduce the expenses of the divorce, and streamline the entire process for a quick resolution. Worrying about finances is one of the biggest stressors during a divorce. A finance expert can take much of the worry and anxiety out of a stressful situation so that everyone feels more comfortable with the plan of moving forward separately.
A full-service Certified Public Accounting Firm located in Denver, Shuster & Company, PC provides quality, personalized financial advice and guidance to individuals, businesses and the legal community. We offer an extensive range of services, with emphasis in forensic accounting, business valuation, and litigation support.