While mask and crowd mandates have lessened in this seemingly post-pandemic time, society has witnessed several major changes and trends that continue to affect our everyday lives. One of these trends is an uptick in divorce rates, as more couples are deciding to end their marriages. The pandemic forced many couples who were already contemplating a divorce to postpone their filings for practical reasons, such as restrictions on court proceedings, child-care issues, health concerns, and financial uncertainty. Lockdowns also resulted in too much together time making it harder for spouses to conceal mental health issues, extramarital affairs, and gambling or drug addictions.
This means that ATKG’s litigation team continues to be busier than ever with family law litigation support. This article explains how to expedite discovery and encourage settlement in a divorce.
Timing the filing
A quick and efficient divorce resolution may be desirable for many reasons. Some couples feel that they have been stuck in a holding pattern and want a fresh start. For others, timing can impact the effective valuation date of marital assets.
For example, a business owner who has filed for divorce may not want to share with her spouse any post-pandemic sweat equity that she’s investing in rebuilding her business. Alternatively, someone who is married to the owner of a struggling business might want a piece of the current value of her spouse’s business interest — before the additional market changes further erode the business’s value.
Timing can also affect awards of spousal and child support payments. If the recipient’s spouse works for a struggling company that is contemplating layoffs, delaying the inevitable may result in lower payments. Conversely, a payer of support payments might want a quick resolution to minimize the monthly payout if he or she expects to earn more in the future.
Working with an outside financial expert early on can make the settlement process more efficient. During discovery, the expert can provide a comprehensive list of documents and procedures needed to complete the job. This can improve the timeliness and scope of discovery.
If discovery is incomplete, the opposing spouse may be concealing assets or income. In this situation, the scope of an assignment may need to be expanded to investigate financial misstatement and asset misappropriation. It is always better to know about missing or inaccurate financial evidence sooner rather than later.
Additionally, for marital estates that include a private business interest, the early involvement of an expert provides adequate time to perform a comprehensive valuation and allocate goodwill, if applicable. A valuation takes time to complete, and courts may be critical of experts who perform rushed analyses.
Out-of-court settlements are generally preferred to court-imposed settlements. First, judges may differ in their interpretations of legal precedent. In addition, they might arbitrarily allocate marital assets to the parties, regardless of the spouses’ personal preferences or the tax consequences.
During settlement negotiations, financial experts can explain complex financial issues, provide summaries of personal income and marital asset values, and evaluate the tax implications of settlement options. They also can help diffuse emotions and focus discussions on valuation and tax matters. Specifically, an expert can pinpoint missing financial information and key valuation discrepancies. ATKG financial experts have experience and are eager to help in both settlement and trial settings.
Let ATKG experts be your ace in the hole
The financial experts at ATKG can help settle complex estates. We are ready to utilize our success-proven tracing and valuation methods, as well as customize our procedures to handle any unexpected developments that will arise during the divorce process. We love when our clients help us too by giving us enough time for sufficient discovery so that we can perform comprehensive and beneficial analyses.
Ruth is a Manager at ATKG, bringing 15 years of expertise in financial statements, assurance services, and litigation support. With prior experience in the Big Four and at a local firm, Ruth has a wealth of knowledge in real estate, construction, oil and gas, retail, and nonprofit industries.
Source Credits: © 2021 Thomson Reuters