To Prenup or Not – Ask Your Friendly Forensic Accountant by Sandra Perez, CPA/ABV/CFF, CFE, and Dylan Stone
Posted on August 16, 2023
by
Sandi Perez
Prenuptial agreements, also referred to as prenups, are commonly entered into to address specific financial aspects of the parties who intend to be married. For individuals remarrying, prenups can clarify what assets, including business assets, will be available to the future spouse and what amount will be set aside for either party’s heirs. Ultimately, the intent of a prenuptial agreement is to memorialize and simplify the plan for distinguishing marital income and property for equitable distribution purposes in the event of a divorce. However, all too often, the parties entering into a prenuptial agreement commingle or transmute separate property unknowingly and intentionally.
Under Florida law, a spouse can keep money as separate property if held away from the other marital assets. However, if the spouse deposited those funds into a joint bank account, they would be considered comingled. Property may also be transmuted when a spouse makes or promises gifts or changes the title on separate property identified in a prenuptial agreement. In both situations, a forensic accounting investigation would be warranted to opine if the property is separate or commingled.
Prenuptial agreements also can be valuable tools for future spouses. However, they are only as reliable as their definitions and how well the parties adhere to the agreement terms. If the terms are unclear, it is almost certain that arguments will ensue during divorce proceedings over what was “meant” and “intended” by the language used. Additionally, if the parties to a divorce have not made efforts to maintain the separateness of property, the court will have to rely on forensic accountants to investigate and quantify the impact of obsolete terms and property conversions on support and equitable distribution.
The Forensic Advisory Services team at Berkowitz Pollack Brant has an experienced team of family law professionals to assist legal counsel in divorce proceedings, including the identification and valuation of marital assets.
About the Authors
Sandra Perez, CPA/ABV/CFF, CFE, is director of the Family Law Forensics practice with Berkowitz Pollack Brant, where she works with attorneys and high-net-worth individuals with complex assets to prepare financial affidavits, value business interests, analyze income and net-worth analysis and calculate alimony and child support obligations in all areas of divorce proceedings. She can be reached at the CPA firm’s Boca Raton, Fla., office at (561) 361-2000 or sperez@bpbcpa.com.
Dylan Stone is a senior manager with the Forensic and Advisory Services practice of Berkowitz Pollack Brant. A member of the Association of Certified Fraud Examiners, the American Institute of Certified Public Accountants and the National Association of Certified Valuators and Analysts, he can be reached at the CPA firm’s Boca Raton, Fla., office at (561) 361-2000 or dstone@bpbcpa.com.
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