Deposition Questions for Financial Expert Witnesses

The second edition of Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets has more than 25% new material. I’ve updated the book for tax law changes, I have added material that clarifies topics covered the first time around, and there is brand new material.

One of the new parts of the book relates to the direct examination of financial expert witnesses, especially during depositions. The deposition is the time for the attorney to dig into the background and qualifications of the forensic accountant. It is also the time to ask probing questions about the work done, the the choices made with respect to the financial analysis, and the opinions expressed in the report (or maybe opinions they have but didn’t enumerate in the report).

I have a Direct Examination Checklist in the book that I think attorneys will find invaluable. I can’t replicate the entire list of questions here, but I’m going to give you some snippets of the list of general lines of questioning that you can use with a financial expert witness:

Background and qualifications

  • Educational background—Include both formal education and continuing professional education.
  • Credentials obtained—When were they obtained? How?
  • Credentials not obtained—Why not? Is the expert not qualified for them or did the expert simply choose to not get them?

Read moreDeposition Questions for Financial Expert Witnesses

Do-It-Yourself Divorce?

divorce financial analysisWho gets rich in divorce? They say only the attorneys and experts.

I’ve seen firsthand the high cost of divorce. I typically work on divorces for higher income individuals. They’ve got more complicated financial situations, and that’s my specialty. With the complications comes a lot of arguing, it seems. And even when the parties are fairly friendly, there is just a lot of stuff that has to be sorted out, and there is a cost to the attorneys and experts.

Fancy divorce attorney Laura Wasser is often  hired by celebrities to sort out their situations. She says a “typical” divorce (that’s one for the likes of you and me) will cost $20,000. Ouch. So she created a site to help people have do-it-yourself divorces.

Read moreDo-It-Yourself Divorce?

Is January Really Divorce Month?

You’ve probably heard people talking on social media that January is “divorce month.” In other words, more divorces are filed in January than any other month.

Is it true?

MarketWatch says it is.  But their evidence was only anecdotal. They talked to some divorce lawyers who put a number to the divorce cases that come into their practices… They say new cases are 25% to 30% higher than other months.

That’s hardly scientific. But let’s accept it as true for the moment. Why might it be? Some say it’s because many couples want to have one last family holiday season before telling their children they’re getting a divorce. Others say the stress of the holidays pushes some couples over the edge. Still others say that “new year, new you” also applies to married life for some. And in some cases it’s financial: the spouses are waiting for a year-end bonus or other year-end financial event.

Read moreIs January Really Divorce Month?

Dennis Quaid Child Support: Reasonable Needs

When child support or spousal support is calculated for a “normal” person, we often use a percentage of income. It’s simple. It’s often fair. And it’s a way to standardize things.

When someone makes a ton of money, calculating support based on a percentage of income isn’t necessarily so fair. If someone is making $75,000 per year and the ex-spouse is not employed, paying 25% of the income ($18,750 per year) in child support might seem reasonable. (There are lots of factors involved… I’m using the simplest possible scenario here.

But if someone makes $5,000,000 per year and has an ex-spouse who is not working, is the same 25% ($1,250,000 per year) fair. Many times the answer is no.

In the case of actor Dennis Quaid, the divorce agreement with his ex-wife Kimberly specified $13,750 per month of child support ($165,000 per year). However, if he made more than $1.3 million in a given year, the amount was to be increased. In a recent court filing reported on by TMZ, Quaid admitted to earning approximately $550,000 per month in 2019 (or $6.6 million for the year).

Read moreDennis Quaid Child Support: Reasonable Needs

Disappearing Income and Asset Values in Divorce

We’ve all seen it before: A spouse owns and operates one or more businesses. Divorce is filed, and the “out” spouse is told that the businesses have little or no value. Further, there is no income available to pay support, thanks to the poor financial condition of the businesses.

How can this be when the married couple has lived a good life for years, always having more than enough money to pay for homes, living expenses, and vacations? It’s the case of the disappearing income and asset values, brought on by the divorce.

Fortunately, there are ways to ferret out truth behind the financial picture that is being presented. It likely will not be easy. The “in” spouse controls the money, the information, and the documents. Getting him to turn over financial documents that will prove there is income and value will be difficult.

Read moreDisappearing Income and Asset Values in Divorce

Financial Aftermath of an Imprecise Premarital Agreement

A divorcing couple has a premarital agreement, so everything is simple when it comes to dividing assets and paying maintenance, right? Of course not. Premarital agreements are rarely simple, and they become even more complicated when the language in the agreement is imprecise.

This high net worth divorce case study provides some important insights into the process of completing a lifestyle analysis and calculating support. In this case, an imprecise premarital agreement led to problems in analyzing the marital lifestyle, excluding certain questionable expenses, and calculating future needs.

Read moreFinancial Aftermath of an Imprecise Premarital Agreement

Business Lifestyle Analysis in Divorce

Divorcing spouses who own one or more businesses need a detailed financial analysis in order to properly evaluate these interests. A Business Lifestyle Analysis may be performed to determine the true income of the company and find out where the money is really going. Tracy Coenen talks about how she analyzes the detailed accounting records … Read more Business Lifestyle Analysis in Divorce