lifestyle analysis – Fraud Files Forensic Accounting Blog

07 Jun

Terrence Howard and the Case of the Missing Spousal Support

Empire star Terrence Howard illustrates why it’s so important to pay up when the court orders you to pay spousal support. His divorce from Michelle Ghent has been interesting for years. Back in 2012, Howard signed a spousal support agreement, but later he said that he only signed it because Ghent was blackmailing him. A judge believed him and threw out the agreement.

Ghent appealed, and last year she won that appeal. The agreement was reinstated, so spousal support was back on.

And apparently Terrence Howard is awfully far behind in his payments to Ghent. Their agreement called for support of $5,800 per month plus additional amounts (up to $4 million per year!) depending on his earnings. Ghent is going to court to ask for $909,418 in back support. She says he hasn’t paid what he owes since she won the appeal, and that he’s hiding his income from the Empire series. She says he’s made $9.7 million from the show over the last 5 years. Read More →

14 Sep

Why Women Are Often at a Disadvantage in Divorce

In many divorces, women are at a significant disadvantage, especially when it comes to money. In many marriages, the husband has been the main breadwinner. He often controls the purse strings, and often knows much more about where money has been spent and what assets are owned.

In contrast, the wife has often had lower earnings, and has had little to no control over the money. She may have been free to spend money as she saw fit, but she did not see the bills, pay the bills, or maintain control over bank and brokerage accounts. At divorce time, she has no idea where the money is, where is may have (improperly) gone, and may have no access to it. Read More →

26 Jun

Divorce Financials: Finding Hidden Income

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. Read More →

01 Nov

Divorce Financials: Importance of a Lifestyle Analysis

In the early stages of divorce, clients are required to complete financial affidavits, financial declarations, or other similarly titled disclosures. The importance of an accurate disclosure of assets, liabilities, and income is obvious. Yet many clients are unable to accurately prepare this financial information.

Particularly in high net worth divorces, it may be difficult for the husband or wife to report these financial details because of a large volume of data and/or an inability to compute the numbers. The financial declaration will be a primary piece of information used to divide assets, calculate alimony, and calculate child support. Errors can therefore be very costly.

A lifestyle analysis completed by a forensic accountant can solve this problem, and can add other value to the divorce process. The lifestyle analysis is typically done to demonstrate the spending (or the lifestyle) of the family prior to the separation. Read More →

19 Aug

Lifestyle Analysis in Criminal Cases: Proving Income Without Full Documentation

Both civil and criminal cases often involve an element of proving or disproving income of an individual or business. It is not unusual for a divorce case to include allegations of hidden income or assets. In contract disputes alleging the loss of sales or profits, an accurate determination of income is critical.

In criminal cases, the issues surrounding the income of an individual or business have even higher stakes. These cases are quite often tax-related matters, but cases involving white collar crimes and drug trafficking usually include questions about income too. Read More →

12 Aug

Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets (Video)

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.

09 May

Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets (Book)

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. Read More →

21 Mar

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. Read More →

30 Sep

Determining Support in Family Law Cases

This article was originally printed in the ABA Section of Family Law eNewsletter, September 2013.

Spousal support and child support can be calculated using a number of different factors. The relative importance of the factors may be laid out in local rules, but often the factors are simply listed and defined with little other guidance. Considerations may include:

The actual earnings of each person, including wages, investment income, and other sources of income
The earning capacities of each party, both independently and relatively
Future earning capacities of the parties
The value of the assets divided, and the ability of those assets to produce income
The cash flow of each party Read More →

01 Feb

Kwame Kilpatrick: Lifestyle Analysis in Criminal Cases

In 2008, former Detroit Mayor Kwame Kilpatrick was charged in state court with 8 felonies related to perjury, misconduct in office, and obstruction of justice. In On September 2008,he pleaded guilty to two felonies for obstruction of justice and was sentenced to four months in the Wayne County Jail and ordered to pay $1 million of restitution to the city of Detroit.

The fun didn’t stop there. Kilpatrick has been accused of hiding money that could be used to pay $855,000 restitution owed to the city of Detroit, stemming from the conviction. Despite claiming poverty and an inability to pay the restitution he owes, money has been magically appearing! Money was transferred to his wife, and Kwame himself received $4,000 from a mystery source. None of these funds were disclosed to the state by Kilpatrick, despite being required to do so under the conditions of his probation. It is suspected that Kilpatrick has money hidden, and that is the source of the funds. Read More →