Divorce can be a time of great uncertainty for families. With both partners’ worlds turned upside down, everyone is trying to figure out the best way to survive the process. While a myriad of confusing questions come to the forefront, the first one to address is whether or not the divorce will actually be granted.
No-fault divorce was first introduced in California in 1970, and within a decade many states had followed suit. Today all states, except New York, offer some form of no-fault divorce. No fault divorce is defined as a “type of divorce in which the spouse that is filing for divorce does not have to prove any fault on the part of the other spouse.”[1] In plain terms, all the divorcing spouse needs to do is claim they have irreconcilable differences and that they cannot repair the damaged marriage. This alone will qualify for divorce in a no-fault state, in contrast to a fault-based divorce that is only granted based upon the wrongful conduct of one spouse (e.g., adultery.)
Once the divorce is granted, the next question most people ask is “Who do I need to hire?” Besides the attorney, a key person to have on your team is a financial expert to assist you with questions that arise regarding income, cash flow, and your personal and business assets. This is a key decision that not only needs to be made early on, but also with careful consideration of all facts.
The attorney and the client need to consider a number of criteria and understand that there is no one- size-fits-all when selecting any expert. This is why it’s critical to interview your potential experts to ensure you are making the best possible decision. Below are some key concepts a client should be prepared to ask about and fully understand before selecting an expert:
- The experience and knowledge of the expert – Has the expert worked on other divorce engagements in the past, and if so, how many? Look for experience valuing a business in the industry if there is a business in question.
- The credentials of the expert – Does the expert have a valuation designation, and if so, check that he or she is current in their continuing education. Some of the more common designations include ABV, ASA, CVA, and CBA.
- The professional judgment and common sense of the expert – Try to get a sense of what difficult situations the expert has seen and how they have been resolved in the past. For example, if there is a concern of unreported cash, how does the expert typically handle it?
- The reputation of the expert – Consult your network to determine how the expert is perceived in the community. Is this individual known to produce high-quality work or have there been performance issues?
- Does the expert perform credible work that can be supported or does he or she act as a “hired gun” – You want to ensure that the expert’s report is going to stand up to cross examination. Hiring an expert that will give you unsupportable work will harm the credibility of your case.
- The reliability and timeliness of the expert – Can you rely on your expert to meet the court’s deadlines in a timely manner pending any unforeseen circumstances?
- The accuracy of the expert’s work product – The expert should be accurate both in the work product and also in the report. Perception is nine tenths of the battle. A concluded value can lose all its creditability if the report is not sound and contains even a single inaccuracy.
The ability of the expert to communicate their findings both in a written report and orally through dispositions and trial testimony – One wants to ensure that the expert will be able to provide a report that is easy for anyone to follow. Just as important to the report and work product is the expert’s communication skills and ability to articulate their findings. It’s a popular belief that cases are not won on the accuracy of the concluded value, but on the expert’s ability to convince the trial of fact that their conclusion is the right one.
Lastly, most people are curious about the expense of expert services, as there is always the question of the cost of work versus the benefit one will receive. Hiring an expert can be costly and time consuming for all involved. It’s critical to be fully upfront with your expert and for all parties to fully understand the end product that is needed to support the case (e.g., valuation, lifestyle analysis). This will allow the expert to properly budget and give a realistic estimate for the engagement.
[1] Fin Law – An Overview of no fault and fault divorce law. http://family.findlaw.com/divorce/an-overview-of-no-fault-and-fault-divorce-law.html
