Divorcees Vie for More Than $$$ - CPAs Take Note

What are some of the trends you're seeing in clients going through a divorce? The CPA or accounting professional's role cannot be minimized when it comes to valuing the assets in a marriage.

Many CPAs counsel their clients on divorce proceedings, but lately more than the usual household items are at stake. Separating spouses are splitting up assets such as stock options, pensions, time shares and even frequent flyer miles.

What's the cost of such an ordeal? Plenty, according to one financial planner who estimates a typical divorce costs up to $20,000 depending on how much property and other factors are involved. If emotions are allowed to slow down the process, the cost could run as high as $50,000 in fees.

It's easy to see why divorce costs so much. For example, one issue of primary concern for the financial planner and accounting professional is the valuation of a pension plan. It's often the largest marital asset, yet one that many divorcing couples overlook. To divide the asset, assumptions must be made about the future value of the plan as well as the future of the working spouse's career, and miscalculations are easy to make.

If spouses own 401(k) plans, and if only one plan exists between the spouses, planners advise that one of the most important aspects of dividing up the plan is to secure a QDRO, or Qualified Domestic Relations Order. This document enables one spouse to rollover a portion of the 401(k) plan to the other spouse without current tax implications.

While the impact of the accounting professional's advice cannot be minimized, couples can consider using mediation to achieve a less-expensive outcome.

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Is it time to consider a value added tax?Forbes contributor Joseph Thorndike wrote yesterday that he believes the tax reform proposal by House Ways and Means Committee Chairman Dave Camp (R-MI) was dead on arrival. But he...
Read more from Larry Perry here and in the Today's World of Audits archive.The planning phase of an audit engagement of an entity using US GAAP or a special purpose framework will, with minor differences, include similar...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.