Complex Financial Matters
Resolving property issues in a divorce case frequently involves complicated financial issues.
For example, if one spouse owns an interest in a sole proprietorship, partnership, corporation, or other business, then the business will likely need to be valued. Valuing a business usually involves hiring an accountant or other financial expert to review the financial records of the business and to determine the value of the business. An expert may also be required to determine the actual income that a business owner receives.
At Dragga, Hannon & Wills, LLP, we are experienced working with financial experts, and we are knowledgeable about the issues that arise when a spouse owns an interest in a business.
Accountants and other financial forensic experts can be helpful in tracing property in a divorce. Sometimes it is necessary to use such an expert to identify undisclosed property, “dissipated” property that has been wasted by one spouse during the marriage and separation, or separating non-marital from marital property.
In addition, an expert may be required to determine the amount of income generated by certain assets, like rental properties or investments. An expert may also be required to determine the tax consequences of taxes paid on alimony received or taxes saved on alimony paid. Likewise, a person’s income can be complicated if he or she receives tax-free income, which may apply in cases involving World Bank or International Monetary Fund (IMF) employees.
The resolution of property issues may also involve the transfer of real and personal property from one spouse to the other. For example, the transfer of the marital home from one spouse to the other may require the preparation of a deed that transfers one spouse’s interest in the property to the other spouse.
By agreement or court order, a spouse’s interest in a retirement plan, pension, or other type of deferred compensation plan may be transferred from one spouse to the other. The transfer of a pension interest must occur by court order. Since there are many different types of pension/retirement interests, there are different types of orders that must be used. For example, for a private pension plan that is governed by ERISA, a pension interest must be transferred through a Qualified Domestic Relations Order or QDRO. For someone employed by the federal government and participating in the Civil Service Retirement System or the Federal Employees Retirement System, a QDRO is not effective, and a pension interest can only be transferred through the use of a Court Order Acceptable for Processing. A different type of court order is used to transfer an interest in a military pension from the spouse in the military to the other spouse. There are special rules and restrictions that apply to military pensions.
At Dragga, Hannon & Wills, LLP, our attorneys are experienced in addressing complex property issues that arise in many divorce matters.