WHEN SHOULD YOU HIRE AN EXPERT IN A MARITAL DISSOLUTION?

By Stewart L. Appelrouth CPA, CVA

As published in: FAMILY LAW SECTION E-MAIL GROUP OF THE FLORIDA BAR

Volume 8 Issue 2 July 25, 2005

 

An expert is an individual that has specialized knowledge and experience in a particular area. It is important to keep this definition in mind when contemplating if and when you should hire an expert. For example, a certified public accountant may qualify as an expert in basic accounting matters but may not be an expert in forensic accounting or taxation matters.

Most issues that will involve an expert revolve around either valuation or financial disclosure. A home that will be sold and the net proceeds divided equally amongst the parties may not require an appraisal expert. However, a home that one of the parties will retain as part of their equitable distribution should be appraised by a competent appraiser. The value should not be determined by unqualified individuals using comparable sales.

In today's entrepreneurial world more divorces include family owned businesses. The use of an expert is critical when an ownership in any business is part of the marital estate. There are many individuals who profess to be business valuators. Be careful! Your business valuator should have educational knowledge, valuation experience and be certified by one of the recognized certifying organizations (ex. NACVA, AICPA,). The expert should have knowledge of case law relating to valuation issues (ex. Thompson v Thompson, 576 So.2d 267 (1991)).

In most divorces, determining income is not a problem. The parties have regular wages from their daily employment (W-2) and some interest and dividend income. An expert is not needed to determine whether the parties' income is correct. Through the use of interrogatories or a deposition any small discrepancies in the party's financial affidavits can be ironed out. However, when a party to the divorce action is self employed or has an ownership interest in a business an expert should be employed not only to determine the value of the entity but to determine the income of the party. Again, knowledge of case law is important (ex. Zold v Zold, 880 So.2d 779) and forensic experience is important in determining if all of the income, personal expenses and perquisites paid by the business for the benefit of the employed party are includable in the party's income.

The hiring of an expert must also be cost effective. While one does not know if the expert will make a difference before they are hired the Client and their attorney should consider many factors prior to hiring the expert. Some of those factors are:

Can the expert increase or decrease the value of the marital estate?
Will the expert articulate the issues to a trier of fact better than I can?
Are there undisclosed assets or liabilities that the expert has a better chance of finding than I do?
Are there assets that need to be valued?
Is there undisclosed income?
Have assets been dissipated?
If you answered yes to one of the above questions you probably need an expert for the particular area. If you answered yes to two or more of the above questions then you definitely need an expert for your case.

Remember that experts are not cheap. But a good expert will help your case and your Client. A good expert will not only provide you with the appropriate information relating to your case but will point out the potential weak links of your opposition. A good expert will not be an advocate for your Client's position but will be an advocate for their position. This is an important factor in determining the creditability of the expert you hire. An expert who advocates Client positions without regard for the truth or the factual circumstances is doomed to failure.

A good expert becomes an integral part of the litigation team, assisting with production requests, interrogatory and deposition questioning as well as settlement negotiations.

In the final analysis you and your Client must weigh all of the factors in determining if hiring an expert is the right move for your case. But remember, it is far better to know all of various factors that might influence a trier of fact about your case then to have the opposition point out your weaknesses.