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Why Retain a Forensic Accountant/Business Valuator Early in the Divorce Process?

Posted By Michael Gould, Monday, May 2, 2016

 July 2, 2015

This is just one of the many topics we will be discussing at my session at the Interdisciplinary Catalyst Conference on October 3, 2015 at 4:15PM (  I just completed an assignment as a neutral financial expert and business valuator in a divorce for a couple who had been separated for many years prior to the filing of the complaint for divorce. They did not heed this advice! 

The parties were co-owners of several businesses that needed to be valued.  The valuation process was the easiest part of this disaster!  As you know, emotions very often take over once the complaint is filed and the end of the marriage is in sight.  Well, the couple accused each other of all types of financial wrong doings during the separation years.  The biggest mistake was not involving a financial expert prior to or shortly after the separation to set out how the Companies' ongoing finances and operations were going to be handled and how they eventually would be split up.  In addition, no agreements were made regarding the equitable distribution of retirement accounts, life insurance policies, responsibility for income taxes (the parties filed joint income tax returns during the separation period), or personal perquisites that were being paid from the Companies' funds.  By the way, of course, only one party continued to manage the Companies while the other party got on with their life and moved out of the area. Because they did not retain a financial expert at the outset, they were not even aware of the many issues that eventually would have to be addressed!

So what happened?  The equitable distribution of retirement accounts became a massive analysis as each had their own accounts and all went into payment status during the separation.  To figure out who was owed what required thousands of dollars of professional time and the subpoena of years of bank and brokerage statements.  Next, the analysis of who owed what income taxes was another complex issue as distributions were sometimes taken from the Companies to pay taxes and some years had balances due and some had refunds.  So the spouse who was not in charge of the tax preparation claimed that they were cheated out of the refunds.  Another extensive analysis was required.

Then as emotions continued to escalate, the perquisites taken from the Companies came up.  More forensic accountings of many years of documents that had to be subpoenaed from banks resulted in more professional fees.  I could go on for pages of other issues that could have been handled years before if the financial expert was involved at the outset.

Unraveling the financial issues in this matter involved tens of thousands of dollars of additional professional fees over what would have been incurred if the parties retained a financial expert when they decided to separate.  The appropriate expression is "Pay me now or pay me more later."  I guess the one good thing about this case is that both parties lived to actually get divorced.  Can you imagine the litigation that would have ensued over the estate by heirs from different marriages and relationships that developed during the separation years?  Yes, there were children from different marriages and relationships, just to add a little more drama!

I am honored and excited to have been chosen to present at the Interdisciplinary Catalyst Conference in October.  We will be discussing many topics from business valuations to difficult equitable distribution issues and their income tax implications.

I look forward to meeting you and please bring your questions!  If you would like to submit questions in advance of the session, my e-mail address is

Tags:  businessed valuator  divorce catalyst conference  forensic accoutant  interdisciplinary catalyst conference  neutral financial expert 

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What the Heck has Conciliation Got to Do with Divorce?

Posted By William Levine, Wednesday, April 20, 2016

June 17, 2015 - 11:42

No, it's not reconciliation, as in, let's stay married (though that can happen).
It's not "let's reconcile the accounts" so we'll stop fighting about your spending (which never hurts).
And, it's not placating an angry or menacing person (at least not without reason).

Divorce conciliaation is an active form of divorce mediation that demands and exploits the technical skills and knowledge of amatrimonial arbitrator and the people and process skills of a mediator with sensible advocacy, lots of  professional input, information and evaluation of facts, prospects and outcomes.  It begins with an exploration of a court case, with all of its legal, psychological and financial complexities, and proceeds to intense discussion of how to do better for the re-shaped family than what a court might do (and may be permitted to do by law), while dirving towards the best overall economic outcome.

I will be presenting at the Divorce Catalyst Conference on October 2, 2015 at 2:00 p.m., with lots of materials about the methodology that I use in providing conciliation and other “hybrid" services to divorcing couples and their lawyers, in Greater Boston at Levine Dispute Resolution Center LLC (  After 33 years of practicing family law as a negotiation, trial and appellate advocate (30 in private divorce litigation practice), my wife Chouteau Levine (a retired Massachusetts Probate and Family Court judge) and I have been delivering purely "neutral services" in family and probate cases for almost 4 years, including mediation. arbitration, master work, and conciliation services.

When clients are either disinclined to actively negotiate based on refined "interests," in isolation from what awaits them in court -- their BATNA -- they sometimes need an objective, evaluative facilitator with a strong hand and steady eye, to assist them in weighing their options in relation to what may actually happen in court.  That's where we come in.

So what has that got to do with financial professionals?  The answer is “plenty."  I will talk about the role of valuation experts, forensics practitioners, financial planners, economists, vocational experts and tax preparers in this information-rich process, where adjunct professionals are welcomed, treated with respect and gratitude for their expertise, and not, as so often is the case in divorce litigation, cross-fire.

I hope to see you there and that you will introduce yourself.

Tags:  arbitration  Boston  divorce catalyst conference  divorce conciliation  divorce mediation  Levine Dispute Resolution Center  master work  neutral  William Levine 

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50 "Shades" of Gray Divorce

Posted By Jacqueline Roessler, Tuesday, April 19, 2016

 ‘Gray divorce’ cases raise new financial questions for their attorneys.

A recent Bowling Green University study reported that an astonishing 25% of all new divorce cases filed are by those age 55 and older. Is this the result of changing attitudes towards marriage and monogamy amongst the so-called “Baby Boomer” generation? 
Regardless of the reason, divorce legal and financial professionals need to sharpen the tools in their toolbox to handle some of the particular financial issues affecting gray divorce.

The first consideration that bears looking at in a new light relates to Social Security income. John, for example, is entitled to receive $2,600 per month at his age 66. Mary, a stay-at-home mom, will receive half of John’s benefit ($1,300) at her age 66 - John still keeps his full $2,600. As long as a divorced couple was married at least 10 years, each spouse is entitled to 100% of their own Social Security benefit or 50% of their spouse’s, whichever is greater. In most states, within the context of divorce, Social Security is viewed as an entitlement, not an asset of either party. Therefore, if one spouse has a larger benefit than the other, that's generally ignored in the overall settlement. To put this into context, if one party retains 100% of their monthly pension benefit, they are generally required to pay the other party an offset from other assets. Of course, Social Security is not assignable in the way that a qualified pension plan is.  However, it still constitutes an income source you can't outlive. For an aging couple who had a long term marriage, Social Security income can be a substantial portion of their combined income. Therefore, Social Security income equalization (in the form of permanent alimony) may in some states be considered  reasonable consideration in these matters.

Very few people are aware of the many ways to maximize their Social Security income. Divorced couples in particular have access to certain loopholes that can provide enhanced income over their lifetime. One example is that a divorced spouse may be able to collect spousal benefits (50% of their ex's benefit, reduced for early commencement) beginning at age 62. Upon attainment of age 66, they can switch to receiving their own (unreduced) benefit for life. That certainly complicates the question of how to equalize Social Security income via alimony.

Gray divorce professionals need to view the alimony equation through a different lens. In most jurisdictions, it's generally assumed that alimony will cease at  “normal retirement age.” However, as life expectancies lengthen, what is the new "normal?"  Forget about 65.  Many people continue to work well past the age of 70 or 75. The cessassion date for alimony in some states may be a necessary negotiation point in divorce today. Let's suppose that Michael intends to pay Susan alimony until he reaches age 65 (normal retirement age). When he turns 65, he may be surprised to learn that Susan may expect to receive alimony as long as he continues to earn wages. If there's ambiguity in the Judgment of Divorce, the resolution may only be found through post-judgment expenditures by both sides.

Of course, this is just the tip of the iceberg; required minimum distributions, tax considerations and pensions in payout status are other significant financial concerns affecting gray divorce. I'm excited to present with my colleague, Melissa Joy, CFP of the Center for Financial Planning on "Social Security Benefits and Gray Divorce" at the upcoming Divorce Catalyst Conference in October as we delve deeper into the finances of "gray divorce." 

Tags:  alimony  divorce catalyst conference  elder divorce finances  gray divorce  pensions  Social Security Spousal benefits 

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Life Is A Window To Financial Resolution

Posted By Karen Sparks, Tuesday, April 19, 2016

Recently, I was dispatched by my daughter to attend the senior project presentations at her former high school.  She is finishing her freshman year at Northwestern University and her finals schedule did not permit her attendance to support her friends graduating this year so I became the virtual representative.

All of the offerings for the class of 2015 were creative, thoughtful and diverse.  One presentation in particular caught my attention.  The subject was “The Art of Vulnerability”.  I have always been interested in the many facets of the human condition so I was intrigued to see how this topic would be handled within the window of a 30 minute presentation.

The senior, who we will call Thomas, took us on a journey led by the definition of Sonder- the realization that other people’s lives are as complex and vivid as our own.  He led us through interactive mini skits illustrating how we ask questions but often are not really interested in the answer someone is giving. Or, in a group setting we are hesitant to participate for fear we will be rejected or mocked. In general, he stated that we really don’t take the time to find out the stories behind the person nor are we willing to open up ourselves for someone else to speak into our lives.

As I sat there listening, it was interesting to note how this topic affects the work that we do as divorce finance professionals.  Individuals are seeking our expertise at a time in their life which is very vulnerable-the dissolution of their marital relationship.  The question is, are we taking the time to understand the complex lives of our clients and how that complexity drives the analysis and allocation of their financial assets?  If not, this is certainly food for thought before you might be tempted to break out that software and calculator to jump into your financial analysis.

As a certified divorce financial analyst, I continue to find it to be beneficial to let the journey of the client and the numbers inform how I provide professional services.

Interacting with my peers also gives me a window to many client scenarios and solutions which I can apply to my practice.  One of the most meaningful professional connections for me since 2013 has been the yearly conference by the Association of Divorce Financial Planners which provides an excellent platform for networking and knowledge.  This year’s Divorce Catalyst Conference held in conjunction with Center for Mediation & Training in New York from October 1-4, 2015  will have over 50 workshops on topics such as tax, retirement, real estate, post- and pre-nuptial agreements just to name a few.

I highly encourage divorce financial planning and other divorce professionals to attend this conference as the unique mix of information (along with the mediation prospective) and the opportunity to meet and share practice stories with others is invaluable.  So, please consider setting this time aside in October for a great experience!

Tags:  Center for Mediation & Training  divorce catalyst conference 

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