Keywords: divorce, discovery, financial transparency, forensic accountants, divorce attorney, asset valuation, child custody, divorce process, financial statements, divorce negotiation
Summary: In this episode, Carl Taylor discusses the critical role of discovery in divorce proceedings, particularly focusing on financial transparency. He emphasizes the importance of understanding all financial aspects, including hidden assets and liabilities, to ensure a fair negotiation process. The conversation highlights the potential pitfalls of assuming knowledge about finances and the necessity of thorough investigation, including the use of forensic accountants when needed.
Takeaways:
- Discovery is essential in divorce to uncover hidden assets.
- Financial transparency can significantly impact divorce negotiations.
- Assumptions about financial knowledge can be misleading.
- Hiring experts can provide clarity in complex financial situations.
- Understanding the value of assets is crucial for fair settlements.
- Clients should be proactive in discussing financial concerns with their attorney.
- Not all financial documents provided can be trusted without verification.
- The complexity of divorce can vary based on financial circumstances.
- Investing in thorough discovery can lead to better outcomes.
- Child custody issues are also significant but were not covered in this discussion.
Podcast Transcript
Carl Taylor (00:02.488)
Hello and welcome to the Carl Taylor Law happily even after divorce podcast. This is Carl Taylor. Hope everybody’s enjoying a pleasant holiday season Everyone’s recovering from too much turkey at Thanksgiving and all that good stuff today I wanted to go over something that’s Seemingly simple but
It’s really not what you really think about. And that’s the issue of discovery. Why do we do discovery in a divorce? Why do we request tax returns and financial statements and at times even hire forensic accountants to go through and help make sense of assets and liabilities in a divorce? would seem simple because when you’re married, you kind of tend to think,
Well, these are my finances, So I kind of already know the puzzle pieces and how they fit together. But you could have a partner who’s been divorced planning for years. Maybe they’ve been taking a little bit of money every month that easily goes missing and giving it to their parents or a friend and saying, this for when I get divorced, right? And…
It kind of made me that the topic makes me think about how easily we can be misled, right? Even by something that seems self obvious. So I used to have a friend who worked as a bank teller. And as a bank teller, you see when customers come in, how much money they have in their bank account, right? But that could be very misleading. You know, you could see somebody who goes in there and has $50,000 in their, checking account.
and somebody else who only has $500 and you think, the person with the $50,000 is really doing well. And the person with the $500 has room to improve their finances. But that’s just one piece of data, right? One piece of the puzzle because the person with the $50,000 in their bank account, that might be, they just got a loan and that’s actually debt. That’s money that’s not even really there. It has to be repaid and
Carl Taylor (02:23.054)
the person with the $500 might just use their money as a vessel to quickly shoot it out to investment funds and grow assets or keep their money in the property, real property. So.
It’s very easy to be misled when you’re looking at just a few puzzle pieces and even all the puzzle pieces, but not really putting it together. So that’s why you need discovery. Even if you’re in a situation where you think your spouse has been honest and above board about their finances, there’s a chance they haven’t been. And there’s a chance you haven’t caught it. Especially if you’re not the one who generally does the finance piece of your relationship.
Carl Taylor (03:09.686)
And even if we get discovery, you know, I, as an attorney, I have to help my clients figure out, it probably adequate or do we need to keep pushing? Do we need subpoenas? Do we need, can we trust certain documents provided by the other side or do we need to go and independently get those documents?
Carl Taylor (03:31.606)
that goes for assets as well as liabilities. And if you add in somebody who owns business interests or real property, all the valuations that go along with it could become increasingly complex because it’s not just enough to know what you have. It’s also incumbent upon you and your attorney to try and figure out what things are worth. Because if you don’t know what everything is worth, then you’re not going to be able to smoothly or intelligently negotiate with the other side, right?
if they have a better idea of all the pieces and how they fit together than you do, it gives them an advantage on the train that is your divorce battle. So it’s not that your attorney wants to increase your expenses or go through a complex process or make things that should be simple, more complex to make the divorce fees increase. It’s really more a matter of.
Let’s get all the puzzle pieces together. Let’s see how they fit and let’s see how their property properly valued. And ultimately it is up to you as a client how far you want to go along with that. And ultimately as your attorney, I’m going to do my best to tell you what my professional opinion needs more work. What might be sufficient? You have two W two employees, you get tax returns. There’s no suspicion or evidence of money being hidden and fine. Sometimes that’s enough.
other times you got to dig deeper. And I just want us to keep in mind how easy it can be for a few data points to not tell the whole story or to completely mislead us. Right. There have been times in my career where I really have felt that I found the smoking gun quote unquote and divorce case. And ultimately it was just one piece of data that when I delved deeper, was explainable, you know, and that starts with you and your attorney having that discussion.
and then moving forward to the documents you have and discovery and ultimately, as I said before, might extend to the hiring of experts such as accountants, financial experts, those who can perform evaluations or valuations rather of your assets and liabilities. And some of it’s not gonna require that you go through that entire process, but sometimes especially in high net worth divorce or even middle class divorce.
Carl Taylor (05:55.662)
you’re to have to go through that process and it is a little bit costly, but ultimately if you stand to gain more than what you’re spending, then it’s still a decent investment. So anyway, I hope that you took something from this brief discussion of why discovery is important in a divorce, especially financial discovery. And to be fair, I’m not even getting into all the child custody issues that can arise in a divorce in this podcast. I’m just literally talking about the financial end of it.
So hope everyone stays safe during these holiday weeks ahead and looking forward to a new happy new year in 2025. This is Carl Taylor, Carl Taylor Law Firm, 609-359-3345. You can catch me on my website at www.mynjdivorcelawyer.com. Take care.