Divorce project - by Jon Andrews, CPA, P.C.
Mr. Jones, a successful business man, entered into a second
marriage. Prior to the marriage, the parties entered into a pre-nuptial
agreement. After several years of marriage, they realized that the
marriage was not satisfactory to either one and Mr. Jones filed for
divorce.
Texas community property laws affect every marriage even if there is a
pre-nuptial agreement. In this case, there were significant issues relating to
the income and outgo of funds during the marriage, the nature and amount of
community property, the nature and amount of each individual's separate
property, and the nature and amount of "contribution" from one segment to
another.
Working closely with the attorneys in the case, we were able to develop
analyses to show the parties, and the attorneys, what the results would be under
various scenarios. This project
involved 10 different bank accounts, 7 brokerage firm accounts, and credit card
accounts and several years worth of transactions. We used Quicken and Excel to
categorize and analyze the various transactions and then produce analytical
reports and graphs. Below is an outline of the process:
Create initial plan of action
Record all transactions - sources, uses, transfers
Assign each transaction to a category or categories
Determine nature of transaction - separate, community, mixed, contributory
Trace each person's separate property
Calculate and identify community property
Calculate and identify each person's separate property
Adjust each of the above based on various interpretations of the pre-nuptial
agreement
Present findings to attorneys and parties
In this particular case, a settlement was reached prior to going to court. In
many instances, that does not occur and we then follow up with a presentation to
a judge or jury.
As a result of this project, the parties were able to reach an agreement as to
how to split the property without incurring the additional cost and stress of a
court hearing.
If you are involved, or about to be involved, in a divorce proceeding, either
as a party to the divorce or an attorney, and need assistance with accounting
issues, please click
here
to download our initial questionnaire. After it is completed, email it to us for
a detailed proposal customized to your needs.
The example projects discussed in this site are actual projects that have
been completed. The client names have been deleted to protect their privacy. We would be happy to discuss how these, or other ideas, apply
to your specific situation.
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