As with most of the work done by forensic accountants, the results of the lifestyle analysis can be skewed if “special” items are not treated correctly. Various cash receipts and expenditures of money by the family can have an impact on the calculations. Statutes, their interpretations, and case law may provide little to no guidance on the special items, since it is rare that the family lawyer encounters them.
Closely held businesses present special challenges in the family law setting. Typically, only one spouse is actively involved in the business. Therefore, not only does the spouse control the family’s finances, but he or she also controls all of the records of the business. When the spouse who does not work actively in the business attempts to quantify the income from the business or the value of the business, the spouse who works in the business daily can purposely (and often very effectively) obstruct efforts to get accurate and complete data.
After the number crunching is complete, the results have to be assembled into a report that the attorneys and the court can understand. The expert must assume that the readers of the report have no accounting or financial background. The report must be easy to understand, with exhibits and attachments that support the opinions set forth in the report.