Details

Family Law Services Handbook

The Role of the Financial Expert
1. Aufl.

von: Donald A. Glenn, Thomas F. Burrage, Donald DeGrazia, William Stewart
169,99 €
Verlag:	Wiley
Format:	EPUB
Veröffentl.:	24.09.2010
ISBN/EAN:	9780470916988
Sprache:	englisch
Anzahl Seiten:	464

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Beschreibungen

Titelbeschreibung

Up to fifty percent of financial forensic services are performed in divorces, or in family law business valuations. Providing the first definitive publication on family law for accountants, this book addresses topics unique to family law accounting, tax, valuation and practice. The coverage begins with pre-engagement of the client and proceeds through to trial and preparation and presentation. Sample checklists, work papers, and trial exhibits are included. CPAs and attorneys will benefit from this handbook’s tips on providing financial services in the family law arena.

Inhaltsverzeichnis

Preface xvii Acknowledgments xix Part One Family Law Litigation and Financial Experts 1 1 Introduction 3 1.1 Introduction 3 1.2 Development of Property Law 3 1.3 U.S. Property Systems 4 1.4 Role of Fault in Divorce 4 1.5 Support 4 1.6 Property Valuation 4 1.7 Property Division 4 1.8 Income Tax 5 1.9 Marital Fraud 5 1.10 Conclusion 5 2 Divorce Assignments and the Financial Expert 6 2.1 Initial Contact 6 2.2 Engagement Terms and Conditions 12 2.3 Case Management 14 2.4 List of Cases 18 2.5 Notes 21 3 Planning and Coordinating Discovery 22 3.1 Introduction 22 3.2 Forms of Discovery 24 3.3 Financial Experts 25 3.4 Expert Discovery 27 3.5 Evaluation of Adverse Expert 28 3.6 Conclusion 29 Part Two Child and Spousal Support 31 4 Child and Spousal Support 33 4.1 Introduction 33 4.2 Child Support Factors 34 4.3 Child Support Guidelines 35 4.4 College and Other Extraneous Expenses 36 4.5 Uniform Interstate Family Support Act 37 4.6 Full Faith and Credit for Child Support Orders Act 38 4.7 Introduction to Spousal Support (Alimony) 38 4.8 Spousal Support Factors 38 4.9 Types of Alimony 41 4.10 Income Available for Support 42 4.11 Imputation of Income: Ability to Earn 45 4.12 Imputation of Income: Assets 47 4.13 Double Dipping 47 4.14 Conclusion 48 4.15 Notes 49 Part Three Character of Property 51 5 Community Property or Equitable Distribution 53 5.1 Introduction 53 5.2 Definition of Property 54 5.3 Characterization of Property 55 5.4 Division of Community or Marital Property 57 5.5 Transmutation Agreements 58 5.6 Premarital Agreements 59 5.7 Tracing and Apportionment 61 5.8 Notes 62 6 Tracing Bank and Investment Accounts 64 6.1 Introduction: Circumstances and Objectives of Tracing 64 6.2 What Constitutes Separate Property and Community Property? 68 6.3 The Community Property Presumption and the Burden on Separate Property 69 6.4 Intent and Fiduciary Duty 70 6.5 Tracing Menu Choices in California 71 6.6 Putting on Tracing Evidence at Trial 75 7 Real Property 77 7.1 Real Property in Divorce 77 7.2 Personal Residence 78 7.3 Real Estate Investments 80 7.4 Apportionment of Separate Property Interests 82 7.5 Allocation of Income and Deductions during Pendente Lite Period 84 7.6 Notes 85 8 Retirement and Pension Plans in Divorce 86 8.1 Definitions 86 8.2 Defined Benefit Plans 88 8.3 Defined Contribution Plans 92 8.4 Hybrid Plans 96 8.5 Other Retirement Accounts: Individual Retirement Accounts 96 8.6 Annuities in Divorce 97 8.7 Keogh (or HR-10) Plans 103 9 QDROs 104 9.1 Retirement Plan Basics 104 9.2 Common QDRO Issues and Problems 108 9.3 Conclusion 112 9.4 Notes 112 10 Equity-Based Compensation: Stock Options 113 10.1 Introduction 113 10.2 Fundamental Issues that Need to Be Addressed 114 10.3 What Are Stock Options? 114 10.4 Option Valuation Overview 115 10.5 A Black-Scholes Valuation Exercise 116 10.6 Options as Marital Property 118 10.7 Taxation of Options 120 10.8 Distribution of Options 121 10.9 Conclusion 122 10.10 Resources 123 10.11 Notes 123 11 Separate Business Interests 125 11.1 Introduction 125 11.2 Investment of Community Funds 126 11.3 Personal Efforts during Marriage 126 11.4 Reasonable Compensation Method in California: VAN CAMP Apportionment of Community and Separate Property Interests 129 11.5 Postseparation Change in Value 130 11.6 Selection of Method: PEREIRA or VAN CAMP 130 11.7 Equitable Apportionment 131 11.8 Notes 132 Part Four Business Valuations 133 12 Professional Standards 135 12.1 Introduction 136 12.2 The Early Years 137 12.3 Other Valuation Standards 137 12.4 Application of Standards to Valuations for Family Law 137 12.5 Details of the Consulting Standard 138 12.6 AICPA General Professional Standards 139 12.7 Statement of Standards for Valuation Services No. 1 140 12.8 Developmental Standards 145 12.9 Reporting Standards 146 12.10 Reporting Exemption for Certain Controversy Proceedings 148 12.11 Appendices and Interpretation 1-01 to SSVS 1 148 12.12 Accreditation of Valuation Experts 149 12.13 The Future 149 12.14 Notes 150 13 Premise and Standards of Value 151 13.1 Premise of Value 151 13.2 Standard of Value 152 13.3 Notes 156 14 Determining Enterprise Value 158 14.1 Determining the Subject Company Equity Value 158 14.2 Valuation Approaches and Methods 158 14.3 Qualitative and Quantitative Analysis 164 14.4 Normalizing the Benefit Stream 166 14.5 Developing the Discount Rate Using the Buildup Method 167 14.6 Developing the Discount Rate Using the Modified Capital Asset Pricing Model 173 14.7 Difference between the Capitalization and Discount Rate 173 14.8 Long-Term, Sustainable (Perpetual) Growth Rate 173 14.9 Reconciling the Results 174 14.10 Nonoperating Assets and Liabilities 175 14.11 Notes 176 15 Enterprise, Personal, Business, and Celebrity Goodwill 178 15.1 Definitions of Enterprise and Personal Goodwill 178 15.2 Difference between Goodwill and Other Types of Intangible Assets 179 15.3 Why the Need to Differentiate 179 15.4 Differing Standards of Value and Their Effect on the Goodwill Issue 180 15.5 Qualitative Differences between Personal and Enterprise Goodwill 185 15.6 Quantitative Analysis: Allocating between Personal and Enterprise Goodwill 188 15.7 Celebrity Goodwill 191 15.8 Conclusion 192 15.9 Notes 192 16 Owner Agreements’ Impact on Business Value 196 16.1 Overview 196 16.2 Legal Entities 197 16.3 Customary Terms to Agreements 198 16.4 Premises and Standards of Value 199 16.5 Controlling and Noncontrolling Equity Interests 200 16.6 Impact of Agreement Terms on Value and Examples 200 16.7 Summary 209 16.8 Notes 210 17 Premiums and Discounts 211 17.1 Introduction 211 17.2 Entity-Level and Shareholder-Level Valuation Adjustments 212 17.3 Control and Discount for Lack of Control or Minority Interest Discount 214 17.4 Elements of Control 215 17.5 Market Evidence for Control and Acquisition Premiums 215 17.6 Marketability and Liquidity 217 17.7 Discount for Lack of Marketability 220 17.8 Conclusions 225 17.9 Notes 225 Part Five Trial or Settlement 229 18 Dividing the Marital Estate 231 18.1 Introduction 231 18.2 Important Dates 235 18.3 Marital Balance Sheet and Proposed Property Division Schedules 236 18.4 Property Disposition Options: Settlement versus at Trial 240 18.5 Other Specific Issues and Considerations 244 18.6 Conclusion 246 18.7 Notes 247 19 Preparing for Trial 248 19.1 Introduction 248 19.2 Expert Depositions 248 19.3 Pretrial Motions 250 19.4 Voir Dire and Methodology 252 19.5 Preparing for Expert Witness Testimony 253 19.6 Conclusion 261 19.7 Notes 261 Part Six Alternative Dispute Resolution 263 20 Court or Neutral Expert 265 20.1 Introduction: Role of the Neutral, Joint, or Court Expert 265 20.2 Considerations before the Expert Accepts the Engagement 268 20.3 Considerations while Serving as the Court’s Expert 268 20.4 Considerations When Delivering Findings 269 20.5 Practical Tips 270 20.6 Language and Content of Court Orders 271 20.7 Conclusion 272 20.8 List of Cases 272 20.9 Sample 730 Order 273 20.10 Notes 277 21 Mediation and Dispute Resolution 278 21.1 Introduction 278 21.2 Forms of Dispute: Resolution and Mediation 279 21.3 Fundamental Mediation Blocks 280 21.4 Programs and Providers 283 21.5 Preparation and Participation 284 21.6 Conclusion 287 21.7 Notes 287 22 Collaborative Law 288 22.1 Introduction 288 22.2 The Collaborative Process: Isn’t This Just like Mediation? 289 22.3 Collaborative Professionals: Building a Professional Team 290 22.4 Financial Professional 292 22.5 Collaborative Contract 292 22.6 Disclosure in the Collaborative Process 293 23 Private Judging 294 23.1 Introduction 294 23.2 What Is a Private Judge? 294 23.3 What Factors Should Be Considered in the Decision to Go Private? 295 23.4 What Does a Private Judge Offer? 296 23.5 How the Private Process Is Different from the Public Courts 297 23.6 Ethical Considerations 297 23.7 Statutory Authority 298 23.8 Preparation and Participation 298 23.9 Conclusion 307 23.10 Notes 307 Part Seven Income Tax 309 24 Income Tax: General Rules 311 24.1 Introduction 311 24.2 Child Support 311 24.3 Filing Status 312 24.4 Dependency Exemption 313 24.5 Miscellaneous Issues 315 24.6 Notes 319 25 Tax Consequences of Property Division: IRC Section 1041 320 25.1 Introduction 320 25.2 Section 1041 of the Internal Revenue Code 321 25.3 Transfers of Property between Spouses or Former Spouses Incident to a Divorce 321 25.4 Tax Basis of Assets Transferred under Section 1041 323 25.5 Conflicts with Section 1041 324 25.6 Transfers of Stock Options and Deferred Compensation in Divorce 325 25.7 Stock Redemptions in Divorce 327 25.8 Interest Paid and Received on Deferred Equitable or Community Distribution Payments 329 25.9 Preventing Unintended Outcomes 331 25.10 Notes 331 26 Tax Issues of Child and Spousal Support 332 26.1 Support: General Discussion 332 26.2 Definition of Alimony 334 26.3 Definition of Child Support 335 26.4 Key State and U.S. Tax Court Cases Addressing Unallocated Alimony and Child Support 336 26.5 Alimony Recapture 337 26.6 Nunc Pro Tunc 339 26.7 Payments to Third Parties 340 26.8 Temporary Support Issues 340 26.9 Conflict between Family and Tax Law 341 26.10 Support Arrearages 341 26.11 What Agreements Must Say to Qualify as Alimony 341 26.12 Nontaxable and Nonincludable Alimony and Strategies 342 26.13 Payments after Death 342 26.14 Alimony and Expense Issues of a Jointly Owned Home 342 26.15 Child Contingency Issues and Traps 343 26.16 Substitute Payments 347 26.17 Reviewing Divorce Agreements 347 26.18 Internal Revenue Ruling Publications 347 26.19 Notes 350 Part Eight Marital Investigations and Fraud 351 27 Marital Fraud 353 27.1 What’s Love Got to Do with It? 353 27.2 Value in Fraud 354 27.3 Data Gathering 355 27.4 Business Entity And Marital Fraud 358 27.5 Common Frauds and How to Identify Them 362 27.6 Divorce Planning Strategies to Affect Business Values and Income 366 27.7 Conclusion 366 27.8 Bibliography 367 27.9 List of Cases 367 27.10 Sample Document Request 367 27.11 Notes 369 28 Searching Public Information 370 28.1 Privacy Laws and Asset Searches: Introduction 370 28.2 Asset Searches 371 28.3 Hidden Assets 371 28.4 Databases 373 28.5 Search Engines, Meta-Search Engines, and Directories 374 28.6 Alternatives in Searching 375 28.7 Privacy Laws 377 28.8 Conclusion 381 28.9 Notes 382 29 Bankruptcy and Insolvency in Divorce 383 29.1 Introduction 383 29.2 Overview of Chapter 7 Bankruptcy 384 29.3 Overview of Chapter 13 Bankruptcy 386 29.4 Protecting Domestic Support Obligations in Divorce 388 29.5 Protecting Property Settlements in Divorce 389 29.6 Automatic Stay and Divorce Exceptions 390 29.7 Priority of Obligations 391 29.8 Effect of Bankruptcy Filing on Divorce Decree 391 29.9 Certain Obligations 392 29.10 Dismissal 393 29.11 Revocation of Discharge 394 29.12 List of Cases 394 29.13 Notes 394 Glossary 399 About the Editors 409 About the Contributors 413 Index 423

Autorenportrait

Donald A. Glenn, CPA, CFE, ABV, CFF, CVA, is a nationally known lecturer to judges, attorneys, CPAs and other groups on Forensic Accounting and has authored hundreds of articles in the forensic area and on family law. He has over 30 years of experience in family law and is the co-author of the AICPA publication A CPA's Guide to Forensic Accounting for Divorce Engagements, 2005, and has authored several CPA courses covering family law and marital fraud. Glenn is a Partner with Glenn & Dawson LLP. He has served on the National Board of Directors of the Institute of Management Accountants (IMA) and has participated as faculty expert in the U. of California Hastings Law School trial advocacy program. He has served on numerous AICPA litigation and family law committees and is frequently appointed as Court's expert in family law matters. Thomas Burrage, CPA, is Principal in Charge of Litigation and Valuation, Burrage & Johnson, CPAs, PLC. He performs expert witness in cases fraud malpractice, minority shareholder, economic damages and family law. He is co-author of Wiley's Divorce and Domestic Relations Litigation, and AICPA's CPA's Guide to Family Law Services, and a contributing editor to PPC divorce taxation publications. Donald J. DeGrazia, CPA, ABV, is senior shareholder in the firm, Gold Meltzer Plasky & Wise, specializing in federal and state taxation, multi-state taxation, and matrimonial taxation. He is also Chairman of Integra International, Inc. He provides various court and arbitration testimony, including matrimonial expert witness. William B. Stewart, CPA/ABV, CVA, CFE, is principal of William B. Stewart CPA firm, specializing in forensic accounting. His expertise includes business valuations, family law, mediation consulting, and business advisory services. He has been appointed by the courts as an auditor, expert and receiver in large commercial litigation, and family law cases. He is a frequent speaker to legal and accounting organizations.