Divorce Lifestyle and Income Analysis

A lifestyle and income analysis is done to help you understand the inflows and outflow of the marital estate pre- and  post-separation.  It establishes the marital standard of living to be used as a benchmark during the divorce settlement.

Our process requires you to be involved, but our experienced staff works hand-in-hand with you to collect and categorize information.  Then, we take the data and input it into our templated software to summarize and report income and expenses into court defined expense categories related to housing, vehicle, insurance, children and personal expenditures.  The annual amount is then converted into a monthly average for use in the court required financial affidavit.

Our experienced professionals will work with you to review the outputs of the process and will recommend potential adjustments that may be required to reflect anticipated post divorce changes in expenditure needs.

This analysis provides the information required for: support requests, budgeting for post divorce living, and for settlement analysis.

Division of Marital Assets

The division of marital assets is a complex process that requires an understanding of case law, state statutes, federal tax regulations and valuations. The objective is to capture the tax-effected values of the parties assets and liabilities and recommend a division of these assets.

Our professionals are experienced in partnering with you and your legal or mediation professionals to analyze and propose various options for asset division.

Settlement Planning

In this role, we help you see the overall picture by providing a snapshot of your financial situation and analyzing potential settlement scenarios. We will present our analysis in the form of spreadsheets, charts and graphs that outline the projected cash flow, net worth and tax impacts for you and your spouse in each scenario. Then we discuss the pros and cons of each option with you and your attorney so that a strategy can be developed and pursued.

Once we have setup the models, we can provide on-the spot analyses during mediation, facilitation or negotiations to help resolve property distribution questions and examine the pros and cons of different settlement proposals.

Alimony & Child Support Analysis

The determination of alimony takes into consideration the income and/or imputed income of you and your spouse as well as the lifestyle needs of the non-moneyed spouse along with the moneyed spouse’s ability to pay. Alimony calculations must also be tax impacted as the payer can tax deduct the payment and the recipient must include alimony received as taxable income.

The total monthly child support amount is typically governed by state statute. The total award then is proportioned between the parties based upon their respective incomes.

Pension Valuation and Allocation

You and/or your spouse may have pension benefits that include pre-marital and martial vesting portions.  In such cases, the pension benefits must be allocated between marital and non-marital categories.  The non-marital portion is not divisible as a marital asset.

Pension benefits can be divided between the parties either by dividing the future monthly benefits between the parties, or by calculating a lump sum present value to be utilized in the division of marital assets. Our professionals are experienced with these calculations and are happy to assist in these matters.

Tax Analysis

A tax analysis is a critical part of the divorce process. An analysis of current and/or prior year income taxes must be ascertained. The tax liability and/or refund status must be appropriately identified and allocated to the parties.

Additionally, the assets must be tax impacted in order to create a fair distribution. For example, if one spouse keeps the marital home with a fair market value of $500,000 and a cost basis of $250,000, there will be no income tax due on the sale of the home. If the other spouse receives a brokerage account with a fair market value of $500,000 and a cost basis of $250,000, there will be a tax on the $250,000 profit at the time of the sale. Therefore, the value of the brokerage account should be reduced by the associated tax liability in order to create parity between the parties.