How a Lifestyle Analysis Can Be Used in a Divorce Case

A 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.

Calculating the lifestyle of the spouses prior to separation can provide insight into the lifestyle the married couple enjoyed and the cost of that lifestyle, as well as the income that was or is required to fund the lifestyle of the married couple. The results may be used to prove a spouse’s financial needs following divorce. In other words, a detailed analysis of the spending during the marriage can be the basis to calculate the funding the spouse needs to maintain a similar lifestyle after divorce.

Red Flags of Fraud in Divorce

This article was originally printed in the ABA Section of Family Law eNewsletter, January 2014.

The vast majority of family law cases are settled without trials. However, a client should not enter into a voluntary settlement if there are significant concerns about the truth of the financial disclosures and indications that assets or income may be hidden. The first step in determining whether a forensic accountant is needed to evaluate the finances of the parties is the identification of “red flags” of fraud. A red flag is simply a warning sign or an unusual item or circumstance.

Attorneys often use their instinct to determine when a forensic accountant is needed in a family law case. If something does not feel right, it probably should be investigated.  A client is often suspicious of the spouse even before they are separated. The spouse may even be known to manipulate the money.

Divorce Investigations: Finding Income and Assets in an Income Tax Return

tax amnesty programThis article was originally printed in the ABA Section of Family Law eNewsletter, July 2013.

While consumers generally hate income tax returns because of their complexity, they can be invaluable sources of information in divorce proceedings. Not only do they provide insight into prior years’ earnings, they can also point to assets and sources of income. They may be used to unearth financial information that a spouse omitted from the financial disclosures, and can hold subtle clues to otherwise unknown financial details.

For example, assets are sometimes sold by the spouses to generate cash. Many times this may be a taxable transaction reported by the purchaser to the taxing authorities. Therefore, such a transaction will be required to be reported on the income tax return, and this may help unearth a hidden asset or provide clues to concealed cash.

Real Housewives Teresa Giudice Fraud Indicment

teresa-giudice-mckmama-indictment

Yesterday Teresa Giudice and Guiseppi (Joe) Giudice were indicted by a federal grand jury in Newark, New Jersey on the following charges:

  • Conspiracy to Commit Mail Fraud and  Wire Fraud
  • Bankruptcy Fraud
  • Bankruptcy Fraud – Concealment
  • Bankruptcy Fraud – False Oaths
  • Bankruptcy Fraud – False Declarations
  • Failure to Make Tax Return

The mail fraud and wire fraud counts are related to false statements and documents that the Giudices allegedly submitted in order to get loans. Banks which loaned the Giudices money included Park Avenue Bank, Wachovia (now Wells Fargo), Sterling Bank, and Community Bank of Bergen County.  Non-bank lenders include HomeComings Financial Network, Eastern American Mortgage, and Alterna Mortgage.

Protecting a Spouse’s Financial Interest in Divorce

case-of-moneyThis article was originally printed in the ABA Section of Family Law eNewsletter, June 2013.

When a spouse knows that divorce is in his or her future, there are obvious steps to be taken. Securing a competent divorce attorney is one, and thinking about the division of assets and income is another. Yet when it comes to the financial details, clients often do not know what to do.

An uncertain financial future may scare the client, but the fear of the unknown makes it more important than ever to focus on protecting the client’s financial interests. The divorce attorney can provide this list of simple (but sometimes overlooked) tips to the client to help aggressively fight the financial case in divorce court:

Hide and Seek: When Money Goes Missing in a Divorce

Today I’m appearing on Blog Talk Radio with Steve Peskind of Peskind Family Law.  We are talking about what happens when money goes missing in a divorce. I will be telling listeners about the value of a fraud examiner in a divorce case, some techniques I use to track down money that has been hidden, red flags of hidden income or assets, and a few of the more interesting divorce cases I have worked on. We will wrap up the show with a discussion of what a Lifestyle Analysis is, and how it can be used in a divorce to bring clarity to some of the financial issues.

The show will go live at 4:00pm central today, July 11, 2013, and then will be available later for those who weren’t able to listen live. If you are listening live, you will be able to call in and ask questions!

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