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Divorce Pitfalls

Divorce Pitfalls

How much does a simple divorce cost? This is a question that is asked of us often. Many believe their divorces will be simple. Sometimes they are right. Often, they are not. A simple divorce requires both parties cooperating to make it so. This is where things fall apart. We have learned that there is rarely such a thing as a simple divorce. Even situations that appear conventional and straightforward can require a forensic accountant to unravel. Here are two examples of problems that can be encountered in simple divorces:

  1. Business owners often plan for divorce by structuring their affairs to reduce their gross business income for several years prior to filing.  The plan is to create an income record that will reduce the value of their business as well as their personal income.   But even W-2 employees can conceal income and hide assets.  One strategy is to over withhold Federal and State Income Tax.  This can conceal marital assets by building up a savings account with the IRS as well as make an employee’s net income artificially low to minimize awards of child support and spousal support.  It often takes someone with the skills of a forensic accountant to discover this. 
  2. Cryptocurrency can be used to hide assets.  Traditional divorce lawyers have so far had only limited experience with and exposure to cryptocurrency assets.  They are tough to locate and, once found, they can be hard to seize.  Values can vary widely from day to day.  The help of a forensic investigator knowledgeable about these assets is needed.  Since seizure is difficult, one strategy is to seek an equivalent value in other assets for the non-cryptocurrency owner spouse.  With the growing ownership of cryptocurrency, this issue will become more common.

When we recommend hiring a forensic expert we often are met with reluctance. Understandably, Clients do not want to increase costs in an already expensive divorce. But you don’t know what you don’t know, and this can hurt. In a proper case, a forensic expert is worth the extra cost.

If you need help with divorce or another family legal matter, contact one of our experienced family law attorneys to assist you.

Use the form below or call 602-277-4441 today to schedule a free consultation.

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Platt and Westby, P.C. has offices in Phoenix and Gilbert, Arizona.