Category Archives: Expert Witness

A financial professional can fill two distinct roles in family law cases. He or she can be a consultant who provides analysis and opinions privately to the attorney and client. The consulting expert’s work and conclusions are not intended to be presented in court, and are intended to be of an advisory nature. The other role is that of a testifying expert, alternately called an expert witness.  The testifying expert must be disclosed in the event that the case goes to trial.

The services of a consulting expert may include:

• Explaining financial topics to the attorney and client
• Providing opinions and advice on financial matters, including the value of assets and liabilities, the taxability of settlement scenarios, and the strengths and weaknesses of the financial portion of the case
• Helping to develop a litigation strategy
• Devising a strategy for presenting financial issues to the court
• Evaluating a testifying expert’s work as a “second set of eyes,” which may help identify weaknesses or opportunities in the testifying expert’s work
• Scrutinizing the work of a financial neutral appointed in the divorce

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Family law cases involving complex financial issues often require the assistance of a financial expert for the following issues:

• Preparing a financial disclosure, including creating a marital balance sheet
• Comparing balance sheets from period-to-period to evaluate changes in assets and liabilities
• Analyzing financial disclosures or affidavits prepared by the spouses
• Calculating the historical income of the spouses
• Determining income (or the ability to pay) in order to calculate support
• Determining the standard of living (or the need for support)
• Valuing business entities or other assets (such as real estate, pensions, and the like)
• Identifying assets and determining whether they are non-marital (separate) or subject to division (marital or community)
• Tracing and finding funds or other assets
• Analyzing claims of dissipation, wasteful spending, or fraudulent conveyance
• Evaluating the income tax impact of various scenarios
• Assessing the work of an opposing financial expert
• Other litigation assistance, such as assistance with drafting discovery demands and interrogatories or preparing for the depositions of individuals with financial information

In addition to these financial issues, an accounting expert could also play the following roles in family law cases:

• Assisting with settlement activities, evaluating the financial impact of a settlement offer, making certain calculations, and giving opinions on various settlement scenarios.
• Mediating a divorce case with financial issues to help the parties reach a settlement.
• Acting as a neutral expert in the divorce, providing an objective opinion on financial matters. The parties may agree together on the financial neutral, or the court may appoint the accountant.
• Participating in post-court activity, aiding in the evaluation of financial disputes, including things like allegations of fraud during the divorce process or motions for modification of support.

Some family law attorneys are reluctant to retain forensic accountants in their cases. Money may be a factor, but sometimes the need for an outside expert is not clear. While law firms may have paralegals or attorneys on staff who are very knowledgeable about financial issues, the outside forensic accountant offers several advantages:

1. Experience in financial investigations means the work can be completed quicker and more efficiently. The results are often presented better since experts present their results in court and are used to making things understandable for non-accountants.
2. An outside expert can testify, while law firm personnel cannot. Even though the family lawyer might not intend for the case to go to trial, it is always a possibility, and therefore it pays to have a financial professional who could testify if necessary.
3. An outside expert is generally perceived as more objective. Ethical forensic accountants attempt to be independent and objective in their opinions, which bolsters the credibility of the calculations.
4. Forensic accountants have experience finding red flags and issues. Their analysis is often more thorough, and their ability to spot problems is often more developed. This can be invaluable for finding issues that were previously unknown.

Sometimes it seems like the numbers aren’t complicated and an expert witness isn’t required. But one of the most important things your forensic accountant may do is properly present the numbers. Non-experts don’t often know how to present the numbers in the best way. Someone who does fraud investigations and expert witness engagements all the time will likely have a better way of presenting the data.

The culmination of a financial expert’s work in a divorce or child support case is the expert report. This is followed by testimony, at deposition and possibly trial. The process of reporting and testifying should not be taken lightly, as these tasks make the financial analysis come to life.

The forensic accountant or financial analyst will complete a lifestyle analysis or other financial analysis, typically producing a report that can be understood by non-accountants. The financial expert always runs the risk that a user of the report will not understand it. This is especially precarious when the user of the report is the judge in the family law case.

The Report

Although a written report is not necessarily required of a financial expert in a family law case, a written report is recommended because it is the best way to present complicated financial issues. The report is a roadmap of the financial issues for the attorneys and the judge. Read More →