Forensic Accounting and Family Law
Appointments as single expert can be accepted and reports provided in a specified time frame. These provide an explanation of the methodology and explanation of the ‘value to the owner’ basis of valuation, to the extent considered applicable. Flexibility in the process exists and there can be a presentation of the report to instructing solicitors or their clients. The ability to have aspects explained and to ask questions can assist understanding and acceptance of the process and conclusions of the report.
Often, the respective clients’ understanding of the applicable valuation methodology and considerations goes a long way towards reducing the conflict associated with their differences in expectation regarding the value of business assets.
On many occasions, the client may not have an understanding of the business structure or the assets which are held in the family business or entities. In these cases, one of the helpful things which can be provided is an analysis of the structures, how money flows through business and asset holding structures and what assets exist. From there, specific valuation assignments can be considered.
Family Law Settlements
Sometimes the client may be offered a settlement and it is important to understand whether it is reasonably in the vicinity of fair value or whether it is too low. Such offers may be accompanied by an accountant’s report or opinion of value and it will be important to understand whether the report has been prepared on a reasonable basis.
One feature of the single expert system is that there is no inherent process for the peer review of expert reports and opinions. If there are large amounts at stake, if the business arrangements are complex or the legal team is unsatisfied with aspects of the report, having it peer reviewed can bring either comfort or support for corrective action.
A consulting forensic accountant can help the legal team frame instructions to another expert, identify issues for clarification in a report and can assist in identifying areas of the report for cross examination questioning.
Settlements can involve extensive taxation implications and sometimes the taxation implications asserted by the other side are incomplete or contingent. It is important to understand the full impact of taxation on any settlement and the extent to which offsets, elections and structuring can reduce the taxation cost associated with a settlement.