Forensic Accounting and Illinois Divorce
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Attorneys use forensic accountants in order to trace, locate, and evaluate assets before determining how marital property should be divided in a divorce as well as to determine what amount is appropriate for child support (whether there was a marriage or not).
When a married couple decides to get a divorce, the Illinois courts will divide marital property so each party receives an “equitable”, or fair, share. There are three steps used by the court to divide property. The first step is to classify the couple’s assets as either marital property or separate property. Marital property is divisible upon divorce, while a spouse’s separate property usually remains in his or her own possession. The second step is value all the assets. The last step is to distribute the property in a fair amount to each spouse.
There is not a set formula to determine property value, especially in the case of a business, or another complex item of property that does not have an easily known value. Attorneys are experts in the law, but can’t testify as to what something is worth. In order to ensure that their client receives their deserved share of marital property or child support (or doesn’t pay too much), forensic accounting is used to trace, locate and most importantly, place a value on assets.
Forensic means suitable for use in a court of law, so a forensic accountant must always work with litigation in mind. A client and their attorney hires a forensic accountant to determine the value of an asset. A common call we get is from a person whose ex has a business and is hiding money. A forensic accountant helps determine the true worth of a business even when money is being paid under the table.
It is also common for a forensic accountant to determine the value of a business that isn’t hiding assets. For example, if you married an attorney or doctor that became a partner in a practice during the marriage then that under Illinois law is a marital asset. Your lawyer with the accountant will figure out the value of that business and your share of it. Through their work it is likely that your ex will have to buy you out with a fair value of what your interest is worth. In addition if they are paying you child support the lawyer and accountant make sure that you get what you are entitled to or on the flip side that you don’t pay too much.
Forensic accountants and the attorneys that work with them on a regular basis are usually not cheap. That means that if you are fighting over a business that isn’t making any money then you might not need this type of help. On the other hand when you either own a successful business or have a spouse/ex that does you could cost yourself tens or hundreds of thousands in losses by hiring the wrong law firm.
While there are thousands of family law attorneys in Illinois, in our opinion there are only a handful that have the right experience and track record to hire when valuing a business is the big issue in your case. If you would like our help in finding the right lawyer for your case please do not hesitate to contact us.