Month: March 2011

If you are looking for a divorce kit or online divorce you may be searching for a quick and simple process in which to finalise a divorce. You and your ex-partner may have reached a mutually acceptable property settlement with none or limited custody issues? You may simply need to formalise the agreement?

If you are in this situation, then the cost of divorce can be kept to a minimum and the divorce or separation process can be relatively simple. It’s advisable that any informal agreement is properly formalised with a divorce solicitor, so that it is recognised under the law and your partner can’t reneg on the agreement at a later date and obtain a greater percentage of the property settlement. Remember that the price of houses, shares and other assets in divorce can change very quickly (both increase and decrease) and an informal agreement may come unstuck if it is not formally ratified. Even if you believe that your financial affairs are straight forward, a consultation with a forensic accountant who specialises in divorce and family law valuations can ensure that you have considered all assets (and debts) in the property settlement and that there are no adverse tax consequences arising from the divorce/separation process.

If you or your ex-partner have a business (either as a sole trader, company, or trust) then it’s particularly important to obtain financial and valuation advice. One appointment with an expert forensic accountant in this area can often have a substantial effect on the net wealth of the parties following a divorce. If your ex-partner owns a business they generally have greater access and knowledge about the financial health of the business than you do.

Depending on the situation and the length of the marriage your ex-partner may want to artificially increase or decrease the value of the property. This is relatively easily performed with access to the books and records of the business.

An expert forensic accountant familiar with property settlements will be able to review the books and records of the business and provide a valuation, which can be used to negotiate a property settlement. A forensic accountant will also be able to detect whether there are any adjustments made by your former partner which do not form part of a proper valuation methodology which is acceptable to the Courts.

The use of an expert divorce solicitor and forensic accountant can ensure that your interests are best represented and that you have the best advice throughout the divorce or separation process.

To summarise, if you are looking for a divorce kit or online divorce, we strongly recommend that you take the time to obtain expert legal, and accounting advice. The cost of the advice in most cases is very easily covered with the identification of assets and debts which can change the value of the property settlement and ensuring that the proceeds from a divorce are not unnecessarily spent in increased taxes.

If you would like more information which can help you decide the best course of action following separation, then we would be happy to discuss this with you further on an obligation free basis. Please contact us to arrange a phone or in person appointment.

If you are looking to obtain a divorce then you need to find a solicitor to guide you through the process. Solicitors who specialise in divorce and have obtained specialist accreditation are called Family Law Accredited Specialists. Once you have decided to engage a lawyer you will become their client and your solicitor will deal with the Family Court and your ex-partner’ solicitor.

Your solicitor will ask you to provide various documents. As most solicitors charge by the hour, it makes sense to obtain as much of this information yourself. The types of information you could be asked to obtain include financial information (such as bank statements), and other details about corporate structures, trusts and businesses that you or your ex-partner run. You will also be required to provide details of assets and debts that you or your partner own or owe. Examples of the types of assets and debts that may apply to you include:

Typical Assets In Divorce

• Cash
• Your home
• Investment property
• Superannuation accounts
• Managed Funds
• Shares
• Pensions or other benefits
• Businesses that you either own entirely or a share

Typical Debts In Divorce

• Mortgage on your home
• Mortgages for investment properties
• Personal Loans
• HECS debts
• Credit Card Loans
• Debts to other organisations e.g. tax debts

In many cases, it will be up to you to obtain source documentation and potential evidence about your ex-partners business or other income earning activities. If you can obtain this documentation, it could make a significant difference to the final property settlement.

If you are looking to obtain specific information relevant to your circumstances on how to go about getting a divorce, we recommend that you seek the assistance of a divorce solicitor as soon as possible.

If there are companies, trusts or you or your partner own a business then we also recommend you obtain the advice of a qualified forensic accountant to conduct a valuation. The cost of obtaining a valuation report is in most cases offset by tax and other savings that a forensic accountant can identify.

To arrange a confidential and complimentary meeting in relation to your divorce and property settlement, please don’t hesitate to contact Rushmore Forensic today.

Could this be Australia’s biggest ever divorce claim? An Adelaide woman has lodged a divorce claim worth well over $25 million against her ex-husband in what has become one of the most bitter marriage splits in history.

According to a report in The Australian, the woman, who cannot be named for legal reasons, applied to the Family Court for a $278,000 monthly support payment for herself and her only son.

While the Court rejected this claim, she is pushing ahead for a final settlement from the divorce that would see her receive more than $24 million in property (including a Swiss chalet) and other payments. Her former husband is contesting.

The bitter legal battle – the paper says the pair has been to court on 28 separate occasions – would have to be one of Australia’s biggest divorce cases.

However, even if the woman manages to win a big payout in the final settlement, she is unlikely to match Australia’s two members of the BRW Rich 200 list who have earned a big part of their fortunes from divorce settlements: Nicole Kidman and Lynette Harvey.

Kidman, valued on this year’s list with a fortune of $329 million, received a divorce settlement worth a reported $109 million when she split from actor Tom Cruise in 2001.

Lynette Harvey, the former wife of retail king Gerry Harvey, retained a large stake in Harvey Norman when the couple split in 1982. She was listed on this year’s Rich 200 with a fortune of $205 million; her stake in Harvey Norman is worth more than $170 million.

But these splits are dwarfed by what is widely seen as the biggest divorce settlement in history, finalised earlier this year – the split between US casino mogul Steve Wynn and his wife Elaine.

The pair, who have actually divorced twice (they first married in 1963, broke up in 1986 and then remarried five years later), finalised their latest settlement in January.

According to Forbes, Elaine ended up with 11,076,708 shares in Wynn Resorts as part of the settlement; based on the company’s share price, that stake is worth just over $1.06 billion.

Another billionaire bust-up that is in the process of being settled is the split between Formula One supremo Bernie Ecclestone and his ex-wife Slavica. An official cost to the split has yet to be determined, but initial estimates said the settlement could be as high as $1.7 billion.

Prior to the Wynn’s divorce settlement, the biggest divorce on record was paid by US mobile phone industry pioneer Craig McCaw, who sold a group of mobile phone assets to AT&T in 1994 for $US11.5 billion. Less than a year later, Craig and his wife Wendy split.

In the bitter divorce battle that followed, everyone from Craig’s elderly mother to Bill Gates was called to give evidence. Eventually, Wendy walked away with $US460 million in shares in telco Nextel. Unfortunately for her, those shares later tanked during the tech wreck of 2001.

(Source:  James Thomson, Smart Company, 11/06/10)

About Rushmore Forensic

Rushmore Forensic is a forensic accounting firm based in Sydney. We specialise in the investigation, and valuation of businesses subject to family law/divorce disputes.

When you are factoring in the cost of a divorce, it’s advisable to consider whether it’s in your interests to obtain a forensic accountant and/or business valuation expert to assist you and your legal counsel.

How can a forensic accountant help you?

Forensic accountants are experts at analysing complex financial information and presenting relevant information in a concise and helpful manner to the Court. In many cases, forensic accountants will analyse large quantities of documents (either hard copy or electronic) and either quantify a loss or in the case of a divorce matter, they can reconstruct financial records and provide a valuation for a business.

Business valuations can be an extremely important part of a property settlement and a separate article exploring this in further detail can be found here.

The cost of a forensic accountant can range from a few thousand dollars to over $20,000. It depends on the type of business being analysed or valued, the number of documents, the degree to which the documents are in an electronic form and many other factors.

While it’s useful to consider a forensic accountant in the cost of a divorce, it’s our experience that a good forensic accountant can save you much more than the cost of their services. Unravelling complex commercial structures can often have large tax consequences and expert advice in these types of matters will be in your best interests.

If you would like an obligation free quote to obtain the services of a Forensic Accountant then please don’t hesitate to contact us.

About the Author

Andrew Firth is a Forensic Accountant and expert valuation professional. He provides expert accounting reports for family law (divorce) and commercial disputes.  Andrew is a former investigator with the Serious Fraud Office in the UK.  He has also worked for KPMG and Deloitte during his career. Andrew is based in Sydney and provides forensic accounting services throughout Australia and overseas.

If you are in the process of divorce or leading up to divorce it’s important to understand what assets are likely to be included or excluded from the eventual property settlement. Understanding how the process works, planning for a property settlement and engaging an expert valuer/forensic accountant can all have a major impact on your financial position at the conclusion of the divorce proceedings.

For many people their assets will include some or all of the following:

• The family home.
• Other investment properties.
• Household possessions.
• Vehicles including motor bikes.
• Boats and jet skis.
• Investments i.e. shares and managed funds; and
• Superannuation.

However one common asset that is often forgotten when thought turns to assets in divorce is either your or your ex’s business. Businesses come in many forms and can include small ventures such as online businesses, lawn mowing, milk delivery runs and other activities that are run for commercial gain. If you or your ex-partner is a tradesman, then there is likely to be a business and this will need to be valued as part of the property settlement.

When it comes time for a business valuation expert to value the business, then the financial records that are kept are vital pieces of potential evidence in the divorce proceedings. Many smaller businesses have poor record keeping practices and many jobs may not be formally entered into an accounting system. If you or your former partner runs a business, then it’s important to try and secure as much evidence as possible as to the true trading activity of the business. This can include obtaining copies of diaries, bank statements, MYOB or other accounting files, hard copy versions of invoices and any other documentation which shows the true financial position of the business. The value of a business can have a substantial effect on the assets in divorce, and in many situations it can exceed the value of the other assets combined.

The value of a business in a divorce can have a substantial effect on the final property settlement. The valuations can often be complex and require many subjective matters to be taken into account. An expert valuer and forensic accountant will transform various pieces of evidence (such as diaries and other financial records) into a report which clearly spells out the trading activities of the business, its financial performance and ultimately what the business is worth. The reconstruction of financial records is a core skill to a forensic accountant and together with your legal counsel will play an important role in preparing for the divorce proceedings.

About the Author

Andrew Firth is a forensic accountant based in Sydney. He is an expert valuer and specialises in reconstructing financial records and valuing businesses in litigation. If you have a divorce, commerial dispute or other forensic enquiry, Andrew would be happy to discuss this with you.

Rushmore Forensic have offices in North Sydney and Baulkham Hills. They regularly conduct forensic accounting and valuation work across Australia and internationally.