Financial Analysis for Divorce and Marital Dissolution in California

By Christopher Skerritt, M.Ed., MBA, Chief of Economic Services · Published · Reviewed

KW Economics prepares financial analyses for divorce and marital dissolution matters venued in California: income available for support, the value of business interests in the marital estate, and the tracing of separate and marital funds, each presented so that either spouse or the court can examine the figures.

A divorce or marital dissolution matter asks what income each spouse has available for support, what the marital assets, including any business interest, are worth for the division of the estate, and which assets are separate rather than marital. Each is answered from the business books, tax returns, and account histories rather than from the tax return alone. Read the full divorce and marital dissolution analysis guide.

California courts and expert standards

California courts ask whether the reasoning and data behind an expert opinion are sound and whether the opinion rests on matter of a type experts reasonably rely on, reserving a general-acceptance test for novel scientific techniques; the witness is qualified by training and experience. Economic damages testimony is therefore examined on its inputs and logic: whether the worklife, growth, and discount assumptions have a published basis and whether they fit the record.

Where these cases are heard

Highest court: Supreme Court of California. Federal venues: N.D. Cal., E.D. Cal., C.D. Cal., S.D. Cal. Court system: courts.ca.gov.

Legal framework

Whether California divides marital property equitably or as community property, which valuation date applies, how income available for support is defined, and how the goodwill of a professional practice is treated are questions of law that counsel confirms; the report presents each finding so it can be applied under either party's position.

How the analysis is built

The same four steps apply to a divorce and marital dissolution matter venued in California; the governing framework in California decides how each finding is applied.

  1. Normalize the business's cash flow for owner compensation, personal expenses paid through the business, related-party dealings, and non-recurring items, listing each adjustment with its source.
  2. Value the business or practice as of the date the governing framework requires, under the income, market, and asset approaches as the facts support, and address personal and enterprise goodwill where the framework distinguishes them.
  3. Determine each spouse's income available for support from the same normalized statements, including distributions, perquisites, and cash flow retained in the business beyond reported salary.
  4. Trace separate property through the account statements step by step, classify commingled funds under the framework counsel identifies, and reduce pensions and deferred compensation to present value with the assumptions stated.

Attorney guides for divorce and marital dissolution cases

Other case types in California

Frequently asked: divorce and marital dissolution cases in California

Which California courts hear divorce and marital dissolution cases?

Divorce and Marital Dissolution cases venued in California are heard in the Superior Court (Unified general jurisdiction trial court in each of 58 counties; handles all civil and criminal matters). Final appeals run to the Supreme Court of California. Matters within federal jurisdiction proceed in the United States District Courts for the Northern District of California, Eastern District of California, Central District of California, and Southern District of California.

How does California's family-law framework shape the financial analysis?

Whether California divides marital property equitably or as community property, which valuation date applies, how income available for support is defined, and how the goodwill of a professional practice is treated are questions of law that counsel confirms; the report presents each finding so it can be applied under either party's position. California courts ask whether the reasoning and data behind an expert opinion are sound and whether the opinion rests on matter of a type experts reasonably rely on, reserving a general-acceptance test for novel scientific techniques; the witness is qualified by training and experience. Economic damages testimony is therefore examined on its inputs and logic: whether the worklife, growth, and discount assumptions have a published basis and whether they fit the record.

More questions about divorce and marital dissolution analysis

References

Request a consultation on divorce and marital dissolution cases in California or call (201) 343-0700. Plaintiff and defense counsel.