It is your first meeting with a divorce attorney. Towards the end of the meeting, the attorney recommends that you hire a financial expert to conduct an analysis that could help resolve your case. You like the idea of hiring an expert but, after the meeting ends, quickly forget why your attorney made this suggestion. Here are common situations in which you may benefit from hiring a financial expert, as well as important considerations to keep in mind:

You Have Separate Property

An asset is separate property if it was acquired before marriage, during marriage by gift or inheritance, or acquired during marriage with traceable separate property.[1]  Once property is established as separate, it will maintain its separate character as long as it can be traced or identified.[2]  If you entered the marriage with substantial separate property, or received an inheritance during marriage, for example, you can hire a financial expert to “trace” the acquisition and growth of those assets, as well as their current value. Such analysis is helpful in supporting your claim that assets are separate and that you should receive those assets in the divorce.

You Have a Private Business/Closely Held Corporation

We work with many clients who have their own businesses. In a divorce, it is unrealistic to expect your spouse or their attorney to take your word for your estimate of your business’s fair value. In other words, you cannot expect them to trust that your business is worth “$X” just because you say it is.  To mitigate this, you can hire a financial expert to conduct a formal business valuation. The expert should have valuation expertise and experience testifying in divorce cases.  While employees of the business (e.g., controller, CFO) can provide financial records or “lay witness” factual testimony, they generally will not qualify as an expert witness. Neither will you.

There are other important considerations to keep in mind when deciding whether to hire a financial expert:

• Plan ahead. Financial experts in Washington state are in high demand and may not have the bandwidth to produce an analysis within your desired time frame. Your attorney will reach out to potential experts to confirm that the analysis and accompanying report can be completed timely.
• Budget to pay the financial expert. Financial experts do not work for free – like attorneys, they often require an advance fee deposit before they start their work. Depending on the complexity of the analysis, the total cost of their work may exceed the amount of the initial deposit. Many clients still find this cost worthwhile when compared to the value of the assets in dispute.
• Do your part. A financial expert will need a number of records before they can start their work.  After an initial consultation, the expert will likely provide you with a list of requested documents (bank account statements, business financials, etc.) spanning a certain period of time.  Any delay in providing this information could delay the expert’s completion of their report. Work with your attorney to ensure that the expert receives the documents they need in a timely manner.

If you have questions about this, or other aspects of divorce or separation, the Family Law attorneys at Lasher are here to help.

[1] In re Marriage of Schwarz, 192 Wn. App. 180, 188-189 368 P.3d 173 (2016).

[2] Schwarz, 192 Wn. App. at 190.