Donald A. Glenn, Thomas F. Burrage, Donald DeGrazia, William Stewart

Family Law Services Handbook (eBook, ePUB)

The Role of the Financial Expert

• Format: ePub

Produktbeschreibung

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.

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Produktdetails

• Verlag: John Wiley & Sons
• Seitenzahl: 464
• Erscheinungstermin: 4. Oktober 2010
• Englisch
• ISBN-13: 9780470916988
• Artikelnr.: 38193145

Autorenporträt

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.

Inhaltsangabe

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