Whose Lifestyle Is It Anyway

Forensic accountants are often asked to report on the pre-commencement spending (including savings) “lifestyle” of divorcing parties.  Many forensic accountants simply book-keep the parties’ three-year spending by Case Information Statement category, resulting in an accurate rendering of the lifestyle of the parties and their children as a family unit.  This traditional analysis, however, often fails to take into account the separate lifestyles of the spouses, as well as expenditures for the benefit of the children. Experts for the non-monied spouse may render a traditional, less granular analysis, while experts for the monied spouse may present the lifestyle with great specificity, even to the point of allocating utilities, home carrying costs, groceries, restaurant and vacation charges by family member.

Without proper structure at the outset, the varying approaches to the lifestyle analysis often serve to elongate the process since reconciling the two approaches becomes a project in and of itself.  Sometimes a court-appointed forensic accountant is employed to aid with analysis and provide a framework that will best assist the judge by alleviating disparate approaches which may confuse rather than enlighten the court.

Cipolla is frequently a court-appointed neutral, acting, in effect, as a consultant to the court, which sometimes leads to an expert report and related testimony when the non-neutral financial forensic experts are far apart in terms of their opinions and conclusions.  We perform this forensic accounting function in business divorce, matrimonial, commercial litigation, fraud investigations (including white-collar and tax

investigations) and personal injury claims, as well as in Bankruptcy Court and insolvency proceedings.  With respect to matrimonial litigation, we frequently value businesses and perform income and lifestyle analysis, including a savings component, to help determine alimony (including changed circumstances) and Pendente Lite support.  We also frequently conduct net worth analysis and asset tracing to determine exempt or immune assets for purposes of equitable distribution.

Cipolla has been involved with tax and white-collar criminal defense, forensic accounting, valuation and damages assessment for over three decades and, according to the New Jersey Law Journal readership survey, was recognized as the best matrimonial financial expert, the best economic damages accounting firm and the best business valuation firm, and one of the top forensic accounting firms, litigation accounting firms and business accounting firms in the New York Metropolitan area.  At Cipolla & Co., “we peel the onion” to provide thoughtful, comprehensive and thoroughly researched opinions and conclusions. www.cipollacpa.com