financial statements

office files

Hi there,

Massachusetts is an equitable division state. This means that all property, whenever and however acquired, may be subject to division as well as utilized for support in a divorce case.  If you are an owner or a shareholder in a closely held business and are facing divorce, you need to be braced for the discovery that will soon be headed your way.

office filesThe documents which are considered basic and minimal in order  to value both the business and determine the owner’s true income with perks, are often some of the most private documents of the business.  At least five years of tax returns, audited or unaudited financial statements, buy/sell agreements, offers to sell or buy the business, inventories, insurance policies, customer lists, patents, the list goes on and on.  It is a good idea to have either in-house counsel (if you have them), or hire outside counsel, perhaps referred to you by your divorce attorney, so that the proper protections for the business during the litigation can be put in place.  At the very least, a confidentiality agreement should be signed and approved by the court before the documents are produced.

Most valuation experts and forensic accountants … Keep reading

Organize your finances divorce

Hi there,

This tip sounds simple, but many folks have ignored the finances of their marriage because their spouse is in control (and often controlling), or because they have not “needed” to become knowledgeable.

organize finances divorceIf this has been you, right now, you NEED to find out as much as you can.  Where are your assets (i.e. retirement accounts, bank accounts, investments, etc.) held?  In whose name?  What is the income stream coming into the family?  Gather and make copies of recent bank, retirement and investment account statements and the three most recent years of tax returns.  If none of this is possible because your spouse keeps the records away from you at his or her office, ask about them.  The nature of the response you get may help you decide what to do.  If your spouse is uncooperative when you ask for this information, then that tells you there is a problem.

Also check on your liabilities.  What is the mortgage payment?  How much is left to pay on the mortgage in comparison to the equity in your home?  Do you have credit card balances?  What are they?  In whose name are the cards?  You should also pull a … Keep reading

Hi there,

Discovery is the point in the process where the attorneys, using various legal tools, are able to quantify just what is going on financially, as well as with other concerns, such as custody or parenting issues.

The first financial discovery tools are the Rule 410 production and the financial statement, both of which are described in a prior post. Once those have been exchanged, the attorneys usually move on to Requests for Production of Documents (RPD) which are expansions on the Rule 410 production. If yours is a case where there are business valuation issues or a need for a forensic accountant (more on those in later posts) then those experts will chime in here with a request for the documents they will need.

At the same time as the RPD is sent out, the attorneys often will exchange Interrogatories, which are a limited series of questions to be answered under oath. Generally the lawyers also ask what are called Expert Interrogatories, where we request information from the experts and their reports so that both sides know what all of the valuations are. These experts can range from real estate appraisers, business … Keep reading