Page 31 - Family Law Services

Some websites provide estimates of the value of real and personal property located in various jurisdic-
tions. This information may be helpful to the CPA when identifying assets during the divorce process.
Similarly, there may be details regarding corporate, limited liability company, and partnership owner-
ship available online through websites of the secretary of state, comptroller, or similar governmental en-
tities within the state. Ownership records may be available in city and county courthouses, through In-
ternet services, or other sources. A number of jurisdictions may charge a fee for accessing various rec-
ords. The estimated values obtained through Internet research should not replace a written appraisal by a
qualified appraiser but may give the CPA a good basis for the value of the assets and the net worth of
parties in the beginning of an engagement.

Online Asset Search Firms

Certain websites can be used to search public record databases nationwide. Data from these websites
may include corporate and real property recordings; auto, boat, and plane registrations; and court dock-
ets. These websites may require an initial fee, a static monthly fee, or a usage fee. There may also be
fees for specific asset searches performed. There may be regulatory and privacy restrictions on the use
of information retrieved by these firms, so before using them, the CPA needs to confirm the legality or
restrictions on the use of the information recovered.

Determination of the Nature or Character of Assets and Liabilities

The work performed to prove the separate nature of assets or liabilities is called tracing. Whether the
work was directed by an attorney or the court, the CPA should refer to the laws of the state in which the
engagement takes place in order to understand the methods and procedures that may be accepted locally.

The CPA may wish to meet with counsel at the beginning of a tracing engagement to discuss the rele-
vant case law or related legal issues that could affect the tracing. The attorney and CPA, possibly at the
direction of a judge, should agree on the appropriate rules for tracing the subject assets and liabilities.
During that process, the CPA may encounter facts and circumstances that have not been previously de-
cided in his or her jurisdiction. If that occurs, the CPA may need to make assumptions regarding the ap-
propriate theory, with possible input from the attorney or ruling by the judge.

If the assets and liabilities were acquired by one or both parties during the marriage, they are often con-
sidered marital or community property and, as such, subject to division. If one spouse acquired an asset
or liability prior to the marriage or if the asset was acquired as a gift or through an inheritance, then that
asset may be deemed to be the separate property of that spouse. Some states require that the funds used
to acquire assets be specifically identified. Other states have systems in place to apportion the value or
establish mechanisms for the reimbursement of the marital or community cost of the asset. A number of
jurisdictions use variations of both methods, depending on the facts and circumstances of the individual
case.

Depending on the jurisdiction, the CPA may need to review income earned from inherited assets. Alt-
hough the asset may not be subject to equitable division, the income generated from that asset may be
considered for support purposes.

Valuation and Quantification of the Assets, Liabilities, and Income

Once the assets, liabilities, income, and losses of the marital or community estate have been identified,
their value for purposes of division and distribution must be determined. One consideration is the date of
valuation. The assets and liabilities must be valued at the appropriate date determined under local law. In

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