The complex situation of a divorce is never easy, and most couples will seek out a legal firm that can help them reduce the anxiety and stress that naturally result. A divorce involves the litigation process, the dividing of assets and taxation of investments. While a divorce attorney may specialize in both out-of-court settlements and lawsuits when necessary, a CPA’s assistance is often necessary for the proper dividing of substantial assets and issues related to taxation. Those who are in a divorce that will involve substantial assets and taxation issues should seriously consider working with a CPA.
Legal Matters vs. Accounting
A good divorce attorney is a trained negotiator. She knows your basic legal stance, how to put the divorce in motion, how to pursue assets in mediation and how to finalize proceedings. Also, a good divorce attorney should know her limitations and when to hire expert help. She should be open to the idea of hiring a CPA once the case’s finances move beyond her comfort level.
CPA’s are specialists in finances, investments and all things monetary, including taxation. They have earned their license by passing the uniform CPA Exam. During the process of dividing assets, a CPA will have expert knowledge on the value of each asset and how they can be legally divided. CPA’s work regularly with taxes and knowing tax law is essential in understanding how properties and businesses are assessed by the government.
Divorce attorneys and CPAs often work together to fully understand your financial situation and develop the best possible outcome for you. While it is true that a good divorce attorney might be all you need in a financially simple case, you might need a CPA for a financially complex case because accounting and all its various applications is not something that attorneys are taught in law school. Thus, even though it might seem financially beneficial to forgo outside help, the litigation of a financially complex case will often benefit from a CPA’s expertise.
Redistribution of Assets
In today’s world, assets vary widely and often have numerous facets. For instance, many people are fully or partially self-employed in their own businesses which can range from services that staff employees that have established client lists to IT products that involve intellectual property patents. While any divorce attorney gains experience, through years of work, in division of such assets, no one person can be an expert in everything, especially since the law is subject to constant revision.
Often, assets interconnect. For instance, businesses of self-employed clients may also involve use of the home as part of the business. This means that the sale of a house could force business relocation which could lead to a loss of clientele or immediate income. All potential losses and gains should be part of a fair division of assets. Having both a CPA and divorce attorney can help with achieving the best financial outcome for all parties involved.
Investment assets can create further complications and require a highly educated and experienced CPA. Anyone involved in such a complex divorce should certainly seek expert assistance.
Resolving Tax Issues
If a new year passes during the divorce, it will cause yet another effect: tax implications. No one enjoys dealing with tax law, and having experienced a recent division of assets as well as having changed their marital status from “married” to “single” can cause distinct challenges. A CPA not only advises on the distribution of goods, but on the best possible tax situation or filings for the client. The rigorous efforts of a divorce can be somewhat alleviated in knowing that annual taxes will not present an additional headache.
Divorce Attorneys and CPAs
Whether a person’s assets are large or small, if the finances are complex, it is often good to consider allowing your attorney to work with a CPA. The attorney will handle all legal aspects and will typically let the CPA review all accounting and financial-related aspects of the divorce. The two can work hand in hand throughout much of the process in order to gain the best financial outcome for their client. Divorce law and financial know-how are two entirely different subjects of expertise, yet knowledge of both are necessary in many divorces. When dealing with a financially complex divorce, allowing your lawyer to obtain the help of the best CPA for your situation if often a good idea.