Page 40 - Family Law Services

Real Property

Disputes over a personal residence or investment property that may require a tracing analysis include a
spouse claiming a separate property credit because the property was purchased prior to the marriage, a
spouse claiming a separate property credit because the property was purchased in part or in whole with
nonmarital funds, or a spouse claiming a separate property credit because the property was gifted to
them.

It is not the CPA’s role to determine whether an asset is separate or marital property; however, it may be
necessary to conduct a tracing analysis and document when and how the property was purchased.

Personal Residence

Documents that may be requested in connection with a tracing analysis of a personal residence include
deeds, closing statements, mortgages, notes and loans, canceled checks, real estate tax bills, and bank
and brokerage account statements that show purchase, payments, or deposits of sales proceeds.

Investment Properties

Documents that may be requested in connection with a tracing analysis of investment properties include
the documents listed under the section "Personal Residence," when applicable, plus investor reports; K-1
forms; offering memorandums or similar documentation; partnership, shareholder, or similar agree-
ments; and personal income tax returns.

Presenting Your Findings

Oral Report

The CPA may share preliminary results of his or her work with the attorney or client, or both, by giving
an oral report or update on the progress of the CPA’s assignments. Because tracing is an exercise in pre-
cision, oral reports are best used to discuss general observations or challenges encountered during the
process. Until the CPA’s conclusions are reviewed by the appropriate superior(s) and ready to present,
the CPA should refrain from giving concrete conclusions in an oral report.

Schedules

Schedules are invaluable when presenting a conclusion supported by detailed analyses and other com-
ponents. Think "a picture is worth a thousand words." The most effective schedules are designed to have
the conclusion as the bottom line, the last component of the schedule that the reader sees. If the sched-
ules are very involved, it is advisable to prepare a summary schedule that presents the results of the de-
tail and ends with the conclusion.

Formal Report

The CPA may be asked to prepare a formal report to be circulated for discussion among the attorney,
client, and possibly the opposing attorney, expert, and client, or for testimony at trial. The report should
detail the scope of the CPA’s assignment, methodologies used, and important assumptions made in ar-
riving at his or her conclusions.

Trial Testimony

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