Chapter 39
Family Law Services
39.1 Introduction
(a) Family Law Systems
Family law, also referred to as marital dissolution law, is a common forensic assignment for accountants. This chapter presents an overview of the areas that accountants will likely encounter during a marital dissolution engagement. For a comprehensive discussion of the subject, see Family Law Services Handbook: The Role of the Financial Expert.1
The average divorce rate in the United States is approximately 50 percent for first marriages and higher for subsequent marriages, statistics often described as the triumph of hope over experience.2 Spouses with substantial property or high income often require the assistance of forensic accountants to investigate value and to characterize and divide property and debts. They present financial information and testimony in family court. Investigations focus on locating assets and income. Valuation involves assessing the current value of property; characterization identifies the character of property and debts as community, equitable, or separate property. Finally, dividing the marital estate anticipates financial, family law, and tax considerations. In cases involving significant assets, divorce attorneys work closely with experienced family law forensic accountants. Each state has established its own statutory framework of family law, but they have all evolved into one of two broad categories:
