Tracy explains the purpose of a lifestyle analysis in a divorce case, and the process used to analyze the family’s finances. The lifestyle analysis may be used to determine how much money is required to continue living the lifestyle the parties had while married. It may also be used to find hidden income or hidden assets, and Tracy discusses how she may uncover these items.
High net worth divorces often have a high volume of data which must be analyzed when doing a lifestyle analysis. How can this data be managed and evaluated accurately? Tracy Coenen explains.
Bank statements can be incredibly useful when searching for hidden income during a divorce financial analysis. Both deposits and expenditures should be evaluated, and the process is explained in this video.
A question often comes up relative to the lifestyle analysis in divorce cases: Isn’t is just data entry that anyone could do? Why do I need a forensic accounting expert?
As I explain below, the lifestyle analysis is NOT just a data entry exercise. A level of quality control is necessary in order to ensure that all transactions are included in the analysis and no transactions are duplicated. In larger cases, there may be enormous volumes of data to be managed, and the client needs an expert who can effectively handle the data. Also, the numbers must be categorized and analyzed. Sometimes estimates or judgment calls need to be made. That is the work of an expert.
It is not unusual for the “out” spouse (the one who is not the major breadwinner in the family and who does not have control over the family’s finances) to suspect that income and assets are being hidden during a divorce. When one party is accused of hiding income, how can a forensic accountant find it?
Below are a few techniques that I may use to uncover hidden income. A more in-depth discussion of this topic appears in Chapter 9 of my book, Lifestyle Analysis in Divorce, published by the American Bar Association.
Tracy Coenen, author of “Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets,” shares her insight on uncovering financial details to ensure that divorce settlements are fair and equitable. A forensic accountant and fraud investigator, Coenen wrote the book to arm lawyers with a powerful tool when valuing and dividing property in complex divorce cases.
Where does a forensic accountant begin when trying to calculate the income available for support in a divorce or child support case? Tracy Coenen talks about some of the issues encountered in trying to evaluate income.
When a spouse involved in a divorce owns a business, the finances of that business must be analyzed. A Business Lifestyle Analysis can be done to determine the true income of the company and find out where the money is really going. In this video, Tracy Coenen talks about how she analyzes the detailed accounting records of a business.
My new book, Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets, is being published by the American Bar Association this summer. It will be the only book available on the topic of lifestyle analysis in divorce cases. While there are plenty of excellent books on financial issues in divorce, none of them focuses on the lifestyle analysis, how it is done, and how the results may be used in court.
This book focuses solely on the lifestyle analysis in the family law case, although other services from a financial professional may also be needed in a case. The lifestyle analysis is the process of tabulating and analyzing the income and expenses of the parties. The lifestyle analysis is then used to determine the standard of living of the parties, which will influence support calculations, and possibly property division.
When a divorcing spouse owns a business, it is imperative to dig into the financial records of the business in order to value it and to determine where the money is going. Tracy Coenen and Miles Mason talk about the documents that a forensic accountant needs in order to evaluate the business.