Many clients involved in divorce proceedings have no prior experience of the process. Accordingly, when their legal team recommends instructing forensic accountants like us to assist with their case, the first question they ask is, ‘What does a forensic accountant do in divorce?’
Here, our specialist divorce forensic accountants explain the crucial role we play in divorce cases and discuss when you might need expert forensic accountancy input to ensure a fair outcome.
For assistance call us on 0330 118 8200 or Make An Online Enquiry.
What Does A Forensic Accountant Do In A Divorce?
When a couple separates, securing their own future financial stability and that of their family is usually at the forefront of each party’s mind. Accordingly, one of the most contentious issues that arises is often how their assets should be split.
The starting point for any fair divorce settlement is an accurate asset valuation. In some cases, this can be a pretty straightforward exercise. For example, if the couple’s joint assets are comprised primarily of property, professional property valuations can give the parties and the Court peace of mind that each party is walking away with what they are entitled to.
In other cases, however, ensuring a fair division of assets can be far more complex. For example, if one or both parties own substantial business interests, those interests must be valued and added to the pot to be split between them. That’s where forensic accountants come in. Business valuations are incredibly complicated, and forensic accountants, with their unique skill set combining accountancy know-how with business acumen and analytical expertise, are perfectly placed to undertake them.
What Does A Forensic Accountant Do In Divorce To Value Business Interests?
Valuing a business in divorce proceedings requires far more than simply establishing how much its shares are worth. There are a variety of possible methods through which a business can be valued, and the appropriate one depends on a variety of factors, such as the nature of the business and its trading history. Whilst we might establish a business’s floor value using one method, we will invariably go on to amend and refine that valuation using others, so that our results are not only mathematically accurate but also fair.
An important issue for forensic accountants in divorce cases is ensuring the settlement is as future-proof as possible. What might be a fair outcome on the date of the divorce, might not be in a few years’ time, and our valuation must account for that.
Some assets, such as the marital home, are expected to rise steadily in value over the coming years. These assets are known as ‘copper bottomed’ assets. Valuing copper bottomed assets is relatively straightforward, and the party who receives them in a settlement can usually be confident that the initial valuation will stand or increase.
The value of other assets, however, can fluctuate significantly in short spaces of time. These assets are known as ‘volatile’ assets. The most common example of a volatile asset in divorce cases is a business. A business’s value depends heavily on external market factors over which the parties have no control, so a party whose share of the marital pot comprises mainly business assets might find that their value drops significantly in the years or even weeks following settlement, and that they are left with very little.
Accordingly, securing a fair divorce settlement requires not only ensuring you receive your fair share of the marital pot at the date of your divorce, but also mitigating any future risk insofar as possible. A divorce forensic accountant will collate and analyse all the relevant data to produce a valuation for use by your legal team in settlement negotiations and by the Court at the final hearing.
How Can We Help?
We are a leading forensic accountancy firm specialising in divorce matters. We frequently work with solicitors and barristers from around the UK on divorce cases of all complexities, providing the forensic accountancy input they need to secure a fair settlement for their clients.
We are committed to providing first class forensic accountancy advice tailored to our client’s needs at highly competitive rates. We have developed our own cutting-edge software, the Frenkels Calculator, to allow us to analyse vast amounts of data incredibly quickly. Referred to by one solicitor as ‘the best thing ever’, this software distils weeks’ worth of work into minutes, thereby reducing the amount of time we need to spend on a case and, in turn, our clients’ costs.
We offer a free, no-obligation quote at the outset of every matter and will provide regular fee updates and breakdowns. Often, the early involvement of forensic accountancy experts facilitates a swifter resolution of divorce proceedings, saving both parties significant professional fees in the long run.
To discover more, please call us on 0330 118 8200 or Make An Online Enquiry.
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