Finding the Right Tools for Divorce Accountants

Finding the Right Tools for Divorce Accountants

In no-fault states, divorce is as much a financial transaction as it is a legal one. The law boils down the split into a simple division of assets and calculation of spousal and child support — well, “simple” compared to listening to the couple argue in court for hours anyhow. Many states designate alimony and child support formulas and family law attorneys use settlement statement software to perform the calculations instead of hiring accountants.

Starting With the Right Tool

Dedicated family law software gives divorce attorneys access to powerful accounting tools that speed up the process of property division, support determination and tax calculation. However these products aren’t just for lawyers. Buying a plunger doesn’t suddenly make you a master plumber, and even the best calculation software can’t take the place of an educated and experienced accounting professional. Many law offices prefer to let an expert handle the number crunching and financial advice, and these tools help accounting experts as well.

Help With The Specialized Calculations

Accounting firms that handle a lot of family law cases need powerful calculation software as much as or more than attorneys do. Accountants may be in a better position to understand the math, financial principles and tax laws behind a divorce but that doesn’t mean they should lean on antiquated techniques like clumsy spreadsheets or manual calculations. By using dedicated software financial professionals know they are using the correct formulas for the state and can quickly determine equitable property division or support payments.

Tax-Optimized Settlements

If divorce was a simple calculation then attorneys wouldn’t need accountants. Even in states that have predefined equations for alimony and child support, the parties have the option of agreeing to a different settlement. Accounting firms can use divorce legal software to go beyond simple calculations. They help their attorney clients explore the tax advantages of different settlements. They compare different alimony vs. child support scenarios to find the one that is most advantageous for the attorney’s client. They calculate present value of long-term payments such as alimony and pensions, giving the divorcing couple the option of an immediate buyout rather than years of payments.

Solutions That Work Together

Some aspects of divorce, like federal taxation rules on alimony, are the same across the country while others, such as child support formulas, are state specific. One way to deal with that is to have a general divorce product that interfaces with a state-specific tool such as NJ Case Information Statement software. Accountants share income, expense, asset and liability data between the programs to provide comprehensive divorce analysis for attorney clients. Use the New Jersey software to explore various custody and child support options under that state’s laws, and then use the more generalized product to create a broader settlement plan that includes property division and alimony.

Know Where To Look

Accountants who work with attorneys shouldn’t limit their software searches to accounting software firms. Companies that produce attorney practice management software aren’t just looking to sell to law firms. A host of other professionals including accountants and real estate agents use legal software to run their practices more efficiently, save money and boost profits.

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