Divorce Proceedings


We are often instructed in divorce proceedings cases in which two parties are going through the divorce process and need divorce advice. Our involvement in these types of assignments invariably centres on allegations of understated income and assets by one of the parties, or the disputed valuation of a business in which one or both parties has a shareholding or an interest.

Income

If we are required to focus on a person’s income and assets then our aim is to identify all sources of their income received over the previous few years and reconcile the available amount both with the cost of maintaining that person’s lifestyle and the funds required to acquire any major assets over that period. The divorce settlement process and skills required to do this are those which we have acquired and honed in over 25 years’ involvement in tax investigations work.

By its very nature, it can never be a fully accurate exercise because it relies, for example, on assumptions about the typical costs of the individual’s lifestyle, but its broad findings will either give comfort that all income and assets have been accounted for, or it will

(a) Identify excesses of income which cannot be accounted for in lifestyle, savings or other assets

or

(b) Identify assets which cannot have been acquired out of known income

Divorce Advice

Where our work has identified significant unexplained differences, the findings have been used to effect negotiated settlements which are to the satisfaction of all parties involved.

Valuing a Business in a Divorce

Alternatively, if our instructions are to value a business then our aim is to ascertain what a willing buyer would be prepared to pay for it.

In which case we can either:

a) Carry out a desk-top review, which is a broad-brush approach based solely on the business’s latest published accounts

or

b) Undertake a detailed review of the business in order to identify how it creates wealth

That would allow us to determine the key factors that would be required by a new owner in order to maintain the business’s continued existence and success. This process will identify whether the important factors are, for example, an unusual product or service that the business offers; or the existence of key contracts with customers, or key personnel within the organisation.

There are a number of ways in which a business can be valued but the preferred ones focus on either the business’s assets, or its profitability. We have often seen instances in which one party has claimed that a business is almost worthless because it has very few net assets when, on investigation, we have discovered that the business is actually highly profitable, and therefore far more valuable than has been claimed.

For more information, or to arrange an initial meeting to discuss a specific issue, please contact us.