Quite often in divorce cases, an expert is recommended to perform a “lifestyle analysis” wherein the parties” income and expenses are analyzed by a forensic accountant to determine if there are any discrepancies or “red flags” regarding the parties’ finances. The analysis can be especially important if only one party in a marriage controlled the finances and/or it is suspected that there is hidden income or hidden assets. A trained forensic accountant will analyze the couples’ finances during the marriage and assess the financial picture post-divorce. The accountant will examine the parties marital living expenses and the family expenditures to determine how money was spent during the marriage and by whom. The report will also include an assessment of what each parties’ future expenses will likely be post-divorce.

Thus, performing a lifestyle analysis can provide significant information relevant to custody evaluations, child support, alimony and equitable distribution.  A lifestyle analysis can ensure fair asset division and the establishment of financial support for family members. After all, the goal of the divorce is to allow each party to maintain a lifestyle similar to that which was enjoyed during the marriage, to ensure that children are adequately financially supported, and that each party is financially and fairly supported.

The Lifestyle analysis can reveal dissipation of assets (ie: where one spouse intentionally depletes marital funds). In high-conflict divorces, one individual may start spending excessive money on new relationships, making advance payments for future personal expenses, or abusing lines of credit. A lifestyle analysis can find these discrepancies and can demonstrate to the Court how such spending has changed over time. Additionally, the report can show exactly what assets are available to the divorcing couple. When lifestyle spending matches or exceeds reported income, one can infer that undisclosed income sources fund these expenses.

The Court needs a clear and accurate picture of the assets, incomes, debts and expenditures of the divorcing parties in order to equitably decide the matter. A lifestyle analysis ensures the Court has all the information needed to correctly determine asset distribution as well as decisions regarding child support and alimony in a divorce proceeding.