Marital Dissolutions

Marital Dissolutions

BTZ professionals use their years of experience and education in accounting, auditing, finance, economics and law to serve as economic experts or consultants in marital dissolution matters. BTZ professionals may be engaged by counsel for either spouse or both spouses as a neutral expert to opine on a range of financial matters pertinent to the marital dissolution.

BTZ professionals have a thorough knowledge of and extensive experience in the following areas:

  • Valuation of a business or business interest
  • Determination/analyses of the income of both spouses and other issues pertaining to the determination of child and spousal support
  • Tracing community and separate property
  • Analysis of underlying records to determine the “real income” of a business

Income Support

Financial Analysis of Gross Income Under Family Code §4058

The determination of an individual's income for support requires consideration of California Family Code Section 4058 as well as other judicial decisions that go beyond the boundaries of the Family Code section. Also, the parties' marital standard of living is frequently an important consideration in determining child and spousal support. Brinig Taylor Zimmer has performed income and marital standard of living analyses in divorce engagements on many occasions on behalf of individuals and by appointment of the Court.

In marital dissolution cases, the proper evaluation of the respective incomes of the parties is a key factor in a court’s determination of child and spousal support orders. Other key factors include the expenses of each party and the financial needs of the parties. Governing statutes typically require consideration of both spouse’s income in the determination of the amount of spousal or child support; however, courts are given discretion to customize orders based on consideration of assets, historical lifestyle, earning capacity, and other special circumstances. If spouses have multiple sources of earned and unearned income or own and operate a business, the determination of income relevant to the support calculations may be complex. This determination is further complicated if a Court deems that income of one of the spouses should be imputed based on that spouse’s earning capacity. In California, an earnings capacity evaluation considers a spouse’s ability to work, willingness to work and opportunity to work.

Determining gross income for child support typically involves determining value in statutory sources, which include commissions, salary, bonuses, annuities, interest, and other traditional sources, and discretionary sources, such as employee or self-employment benefits. For spousal support, the court typically considers numerous factors including the extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage and the supporting party’s ability to pay spousal support based on the earned and unearned income, assets, standard of living, and earning capacity of that party.

The financial calculations and expert testimony of BTZ professionals pertaining to the determination of child and spousal support amounts exemplify their thorough knowledge of and extensive experience regarding:

  • California state law regarding child and spousal support issues
  • Business and personal accounting and financial records
  • Identification of sources of income and assets
  • Earnings and benefits pertaining to the imputation of income
  • Providing expert testimony regarding financial and accounting issues pertaining to marital dissolutions
  • Financial analysis

Our BTZ Income Support Professionals

BTZ professionals offering expert consulting and/or expert witness services regarding matters pertaining to the determination of child and spousal support amounts in marital dissolution matters are:

  • Brian P. Brinig, Principal
  • Robert A. Taylor, Principal
  • Paul A. Zimmer, Principal
  • Catherine (Kate) Kowalewski, Director
  • Cheryl Kessler, Director

References

Brinig, B.P., “Determining Income for Support,” San Diego County Bar Association, 2014.

Brinig, B.P., “Calculating Net Income Available for Support,” California Center for Judicial Education and Research, 1996.

Brinig, B.P., “Complex Financial Issues in High-End Divorces,” American Academy of Matrimonial Lawyers (Southern California meeting), 1996.

Tracing Community & Separate Property

For purposes of a marital dissolution, the determination of the status of property as separate property or marital property is an important factor in dividing assets between the spouses. Typically, only one spouse has ownership of separate property, whereas, both spouses have ownership of marital property. However, laws vary from state to state and special circumstances arise.

Separate Property

Separate property generally includes:

  • property owned by a spouse prior to the marriage
  • inheritance or gifts received by one spouse before or after the marriage
  • recovered damages from personal injury claims
  • property transferred from one spouse to the other in writing
  • property attained during marriage in one spouse’s name or with separate assets that did not directly benefit and/or was never intended for use by the other spouse

Separate property may be at risk of becoming reclassified as marital property in certain cases, such as: When a spouse deposits separate inheritance funds into a joint bank account; or the appreciation or increase in the value of separate property during a marriage, either as the result of the other spouse’s direct or indirect investment of that property, principal payments or as the result of changes in market conditions, may also be at risk of falling under the marital property category.

Marital Property

Marital property includes income and assets acquired by one or both spouses during the marriage and can include bank accounts, brokerage accounts, real estate, physical property, businesses and other assets. The future value of these assets may also require assessment at the time of marital dissolution. Debt accrued during the marriage is also shared and its distribution varies.

Community Property

In community property states, such as California, spouses share a 50-50 ownership in all marital property. Thus, throughout the duration of the marriage, all property acquired by either spouse will typically be classified as marital property regardless of which spouse is presumed to own it. In marital dissolutions where one or both spouses have complex and or varied sources of income in addition to traditional salary and wages, quantification of and division of community property may require significant financial analysis and litigation.

Equitable Distribution States

In equitable distribution states, property is generally assigned to the spouse whose name is associated with the property; however, courts attempt to find fair settlements as they factor in circumstances such as each spouse’s income and earnings potential, the length of the marriage, the value brought to the marriage by each spouse, and other circumstances affecting an equitable distribution.

The financial calculations and expert testimony of BTZ professionals exemplify their thorough knowledge of and extensive experience regarding:

  • California state law governing the distribution of assets in marital dissolutions
  • Business and personal accounting and financial records
  • Identification of sources of income and assets
  • Tracing funds through financial records
  • Financial analysis
  • Providing expert testimony regarding financial and accounting issues pertaining to marital dissolutions

Our BTZ Tracing Community & Separate Property Professionals

The financial opinions of BTZ professionals in marital dissolution matters are credible, thoroughly researched, and substantiated by sufficient relevant evidence. BTZ professionals offering expert consulting and/or expert witness services regarding the tracing of community and separate property in marital dissolution matters are:

  • Brian P. Brinig, Principal
  • Robert A. Taylor, Principal
  • Paul A. Zimmer, Principal
  • Catherine (Kate) Kowalewski, Director
  • Cheryl Kessler, Director

References

Landers, Jeff. “Understanding How Assets Get Divided in Divorce,” http://www.forbes.com/sites/jefflanders/2011/04/12/understanding-how-assets-get-divided-in-divorce/#cf984e937128 http://www.nolo.com/legal-encyclopedia/separate-community-property-during-marriage-29921.html
https://anfusocpa.files.wordpress.com/2012/04/newsletters4.pdf
https://www.legalzoom.com/knowledge/divorce/topic/community-property-separate-property