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Divorce project - by Jon Andrews, CPA, P.C.

Mr. Jones, a successful business man, entered into a second marriage. Prior to the marriage, the parties entered into a pre-nuptial agreement. After several years of marriage, they realized that the marriage was not satisfactory to either one and Mr. Jones filed for divorce.

Texas community property laws affect every marriage even if there is a pre-nuptial agreement. In this case, there were significant issues relating to the income and outgo of funds during the marriage, the nature and amount of community property, the nature and amount of each individual's separate property, and the nature and amount of "contribution" from one segment to another.

Working closely with the attorneys in the case, we were able to develop analyses to show the parties, and the attorneys, what the results would be under various scenarios. This project involved 10 different bank accounts, 7 brokerage firm accounts, and credit card accounts and several years worth of transactions. We used Quicken and Excel to categorize and analyze the various transactions and then produce analytical reports and graphs. Below is an outline of the process:

  • Create initial plan of action
  • Record all transactions - sources, uses, transfers
  • Assign each transaction to a category or categories
  • Determine nature of transaction - separate, community, mixed, contributory
  • Trace each person's separate property
  • Calculate and identify community property
  • Calculate and identify each person's separate property
  • Adjust each of the above based on various interpretations of the pre-nuptial agreement
  • Present findings to attorneys and parties
  • In this particular case, a settlement was reached prior to going to court. In many instances, that does not occur and we then follow up with a presentation to a judge or jury.

    As a result of this project, the parties were able to reach an agreement as to how to split the property without incurring the additional cost and stress of a court hearing.

    If you are involved, or about to be involved, in a divorce proceeding, either as a party to the divorce or an attorney, and need assistance with accounting issues, please click here to download our initial questionnaire. After it is completed, email it to us for a detailed proposal customized to your needs.

    The example projects discussed in this site are actual projects that have been completed. The client names have been deleted to protect their privacy. We would be happy to discuss how these, or other ideas, apply to your specific situation.

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    The information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. © 2001-2004 by Jon Andrews, CPA, P.C. and 7D9 Internet Services, LLC. All rights reserved.