Business Valuations from a Divorce Attorney’s Perspective

Episode Transcript
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Melissa Gragg (00:00):
Hi, welcome to valuation podcasts.com, a
podcast and video series aboutall things related to business
and valuation.
My name is Melissa Gragg, andI'm a divorce valuation expert
in st.
Louis, Missouri.
I have the pleasure ofdiscussing business valuations
from a divorce attorney'sperspective with my guest miles
Mason, who was a divorce lawyerin Memphis, Tennessee, also

(00:22):
servicing Nashville.
And I'm sure other parts ofTennessee welcome miles.
How are you?

Miles Mason, Sr. (00:28):
I'm doing great.
Thank you for inviting me,Melissa.

Well, and miles is already kind of a YouTube
star and does a bunch of videosabout valuations, but we're
going to look at valuationsreally from an attorney's
perspective.
And then I can provide someinformation from the experts
perspective, but let's get rightinto it.
What do you see as the reasonfor a business valuation and a

(00:55):
divorce purpose, or why youwould even need something like
this?
Like how do you see it in froman attorney's eyes?

Well, let's start off with the mechanics,
right?
What is the divorce on divorce?
We're going to divide property.
Okay.
We're going to deal withcustody, child support, alimony
attorney's fees.
Okay.
We're dividing the ma theparties in a legal relationship

(01:28):
and making them single.
Now, as far as dividing maritalproperty there, as part of that
process, there's four things wehave to do.
We've got to identify what'smarital.
We have to classify, uh, theassets as either marital or
separate and in a communityproperty States is community

(01:51):
property.
Non-community property, samefunction in most situations.
Okay.
We had to value the asset todivide it.
All right.
Now there are a few exceptionsto that, but when we're talking
about a business, yeah, one,party's going to have to buy out

(02:11):
the a there, if it's maritalproperty.
And then what percentage of theproperty goes to each party?
What part of the marital estategoes each way?
And it's not always 50 50.
Even if the States say it'sequal, it's not.
So once we have a businessownership interest, whether it

(02:32):
be intellectual property, lawfirm, medical practice, a widget
manufacturer, it doesn't matter.
There's a value, okay.
Some are more than others.
And if you're talking about amajor enterprise, it could be
the ownership.
Interests could be North of ahundred million dollars.

(02:52):
If it's a small business, uh, itmay have no value because nobody
would want to buy it.
So as part of the divorceitself, it's a mechanical
process that must be takenunless the divorce lawyer wants
to be sued for malpractice.

Well, and I think that that's an interesting piece
of it, because if you have some,um, stock, if you own some stock
and you get a statement, and thestatement says, as of this date,
it's worth$20,000, then that'spretty easy.
Somebody can just look at thatstatement and they can say,
okay, it's worth$20,000.

(03:31):
Now, the business, or even othersort of tangible assets, you
usually have to get an expertinvolved.
And a lot of times this is whatI've told, um, other clients
too, is that I'm coming in tohelp the attorney understand the
value of a business so that theycan recommend some sort of

(03:52):
settlement or to go to trial totheir client.
But without that piece ofinformation, and, you know, one
person says it's worth amillion.
One person says it's worth500,000.
The attorney just can't say,well, we'll go with 750.
Sounds good.
Cause that gets you into like akind of a malpractice type of

(04:13):
situation.
Right?

Right.
Because let's, let's take yourexample of seven 50.
It is not unusual for a businessowner to have non operating
assets.
That's a technical term for thenon-business valuation.
Uh, folks out there there'sassets owned by the business

(04:37):
that are not really businessassets, especially in smaller,
closely held businesses.
So it could be a timeshare,could be a, a condo down at the
beach could be anything.
And so you've got to be carefuland do the due diligence and do
what your business valuationexpert or forensic accountant

(05:00):
says to do if you want a fair,just and reasonable result.

Well, and I think that another thing that you
touched on, which we can talkabout is trying to discuss how
are the business assets actuallydivided and divorced?
Because traditionally peoplelike, okay, well, we have, um,
you know, a piece of land, okay,can we just split the farmland

(05:27):
in half?
And one person takes one and oneperson takes the other well with
a business asset.
You can't necessarily dividethat asset in half and each take
half.
So how do you see businessassets divided into four?

All right.
Great question.
What I see is a fundamentalmisunderstanding of what
business valuation is and thepurpose it by most divorce
lawyers, especially those thatwe oppose.
All right.

(06:03):
So let's take from the businessowner's perspective.
What is the business owner needafter the divorce control, they
need to still own it.
Still control it.
And preferably not have theirnon-business owner spouse
sitting in saying, I want toshare the profits.

(06:25):
Now it's possible, especially,and I've been involved with, as
I'm sure you have a bunch ofbusinesses where the husband and
wife worked together and theystill keep the business and they
owed it after the divorce.
Yeah.
Yeah.
Well, money, money talks, right?
So that's what the businessowner needs.
Now the knee nod business ownersshould want one very simple

(06:49):
thing, cash.
Okay.
So in a settlement, the goalshould be for each party to have
a, essentially a buyout.
Okay.
Now, but the business owner maynot always have enough cash or

(07:10):
perceive that the amount of cashthat it's going to take is
unfundable.
And to some extent, maybe that'strue.
They may need to go find a, go,have their, take their banker on
a nice vacation, whatever ittakes to get access to a credit
facility, to pay cash.

(07:31):
And the non-business owner wantsmore cash now, rather than cash
over time.
So if either party decides tostep on the other and not go
down the path of a simple buyoutfor cash, there could be all
kinds of problems because thenthey put this solution in the

(07:53):
hands of a judge, which thejudge may have an English major
or a political science major.
And doesn't understand that they, there needs to be enough cash
to do the buyout, but not somuch cash that the business
owner, uh, can operate becauseevery bit of business needs some

(08:16):
capital.
And there's two forms of capitalthat a business can use debt or
equity.
Okay.
And equity is a fancy word forcash and fusion.
Uh, so long way around the barnof saying that first job, the
divorce lawyers to explain thepurpose of the business

(08:38):
valuation.
Now the subtle part is there aretimes that it might be
advantageous for thenon-business owner to take the
seven 50 offer.
Even though the business mayarguably be worth more on paper.
Okay.
Now why would a non-businessowner's spouse want less money?

(09:03):
Well, you don't want to kill thegoose.
All right.
You got alimony child supportcoming in on the other side.
So there are times that it maymake sense to not take a hundred
cents on the dollar for thatclaim.
Now, the other thing is once wecome up with seven 50, even if
it's a, you use three differentmethods and you all come up with

(09:27):
all the arrows point at$750,000,well, again, the fundamental
misunderstanding, most divorcelawyers, if you asked them, if
both business valuation expertssay that in this both parties,
if you ask them, you strap intoa chair, duct tape, um, and then

(09:49):
for some, uh, margarita is down,I'm going to say, what's the
business worth?
When both experts has said it's$750,000, most divorce lawyers
will tell you the businesseswere$750,000.
It's not, it's a calculation.

(10:09):
It's an estimation based onprofessional judgment.
There may be a buyer out there.
And one of the things I think,uh, most P most lawyers don't
understand is that all businessvaluation theory tries to remove
the value to a strategicpurchaser, which is stupid.

(10:34):
Okay.
And the reason why it's donethat way is because there's no
way to know.
I mean, you're talking to, youknow, uh, potentially a crazy
figure.
So who's the most likelypurchaser of a business as a
strategic purchaser.
And this may be a goodopportunity for you, Melissa, to

(10:57):
teach me a little bit more aboutwhat, uh, how that goes into
your thinking.
But I've got to explain to myclient, if I'm representing the
non-business owner, we don't getcrazy money and event.
Disney's going to go in here andjust buy the business up, lock
stock and barrel you don't right, but it's not the business.

(11:23):
Isn't worth seven 50.
And that's where you have to getinto the subtleties.
And it's really hard to explain.
And most business are the otherconcept at play here is that in
divorce, what judges and courtsneed is a number which to the

(11:45):
CPAs and the business valuationexperts make no sense because
they want to give a range.
They want to, they want to sayit's 750,000 ish, which I
completely get, you know, I'm aCPA and a lawyer too.
So I completely understand that.
And the system needs that numberfor the divorce to be decided in

(12:08):
a courtroom.
And it needs to have a number interms of what assets are in
exchanged for the non-businessowner.
But the number is make-believeokay.
It's make believe because wehave no other option.
Not that there's a bettersolution out there.

(12:31):
It's just, we don't have anoption and we have to have a
number.
All right.
And so I think divorce lawyersdon't understand that concept
and it is very rare.
And I was you and I bothattended hundreds of seminars
from ACPA and other legalorganizations.
And very rarely does anybodyever talk about explaining

(12:55):
strategic purchasers to divorcelawyers and how that concept has
to be take it out.
And also I'll throw in there forthe, uh, business valuation
experts who have already deposedthat may be watching.
Yeah.
Most of the business valuationexperts I have deposed, or

(13:18):
cross-examined in the courtroomcannot explain strategic
purchasers, don't get includedin the valuation, but they
always come up with, if they'rerepresenting the non-business
owner, they're always coming upwith and want to say, yeah, but
what if Disney comes along, butyou can't by definition those,

(13:42):
what do you think about that?

Well, I think what you're getting into is a
concept that people will startto hear if they go down this,
which is what is the standard ofvalue.
Okay.
And those terms just meannormal.
You know, just normal words ifyou're outside of this, but the
standard of value is reallypredicted and determined by each

(14:05):
state.
So it could be different inMissouri, Illinois, to
Tennessee, to continue toGeorgia any of those States.
So the standard of value in thestate of Missouri is fair market
value and fair market value isbasically a concept of a
hypothetical willing buyer and ahypothetical willing seller, not

(14:27):
the business owner thatcurrently owns it and not a
strategic partner.
So you have fair market value.
You could have what you'retalking about, which is
investment value or strategicvalue.
And then in some States you alsohave this concept of value to
the holder.
And so I hold the business andthere is value because I am part

(14:50):
of now that gets lost somewherein the nuances of valuation, but
fair market value, hypothetical,willing buyer, willing seller
means somebody off the streetcomes in to purchase this
company, which means I'm not,you know, like if I'm going to
buy a landscaping company, whichmeans, I don't know anything

(15:11):
about the landscaping business,I don't even know how to cut
grass.
Right.
I don't know how to do any ofthat, but I come in and I look
at what's the cashflow, what arethe assets?
How can I make money on this?
And usually how can I makemoney?
Because it just operates as itshould.
Right.
And then the, one of the thingsthough, that you talked about

(15:33):
that I think is interesting,that is the concept of an, uh, a
judge then trying to understandthis value.
Um, and there's always going tobe logic that comes in.
And so a lot of times we go inthere as experts and we say,
okay, we've developed all ofthis valuation.
We've abided by the valuationtheory, we've developed a range

(15:55):
of value.
Usually I pick one number and,but there could still be a range
around that.
But then traditionally the judgegoes, okay, so this is a
landscaper and it's one guy andit's worth$5 million that
logically doesn't quite makesense to them.

(16:18):
And so now you have to bridgethe gap of does this logically
even make sense.
And I think that some valuationpeople and even some attorneys
are just like, listen, we want ahigh number.
We are, we want a low number andwe don't care what it is, but if
it doesn't pass that logic pieceof it and you can't describe

(16:40):
what is the difference betweenthese two, you're going to be
lost with the judge.
And then if you've given arange, you've also given the
judge the capability to decidewhere they want to be in that
range, if they want to be inthat range.
And you could have them go alittle rogue, which I've seen,
you know, judges do.

(17:02):
So.
So that kind of touches on someof the standard of value there's
premise of, you know, like allof these terms, but it really
depends on the state.
And in Tennessee, are you seeingfair market value?
Are you seeing value to theholder,

Right, Tennessee, uh, law often blazes,
no trail.
So our standard has not beendefined other than in the
statute.
Okay.
So what we have my favoriteanswer to the question is from a
wonderful, uh, forensicaccountant here and here in

(17:40):
Memphis named Rob banks, hisanswer to that, uh, like it's
fair market value as adjusted byTennessee case.
Okay.
So we're going to get someparameters for law firms.
We're going to have parametersfor dental practice.
We're going to have parental,you know, for the more common,
especially when begin at aGoodwill issues, which I'm

(18:02):
hoping we don't do in thispodcast, but again, in your core
business, valuation manuals,there's this big exception and
said, don't include strategicpurchasers that I think in every
manual I've ever read, I alwaysgo straight to it because I

(18:23):
think it's a fascinating conceptthat Tennessee law hasn't
addressed.
Many other States haven'taddressed, but as in the core
body of knowledge and theorybehind business valuation.
So the other thing in a Melissa,what I wanted to ask you is have

(18:44):
you been in a battle and I hopeyou haven't in court over
standard of value.

Um, I don't know if it's totally a battle over,
you know, Missouri's a littlebit more clear.
Um, and so I don't think there'salways a battle.
The battle is that we're notusing those terms, right?
So we're not actually arguingover the standard of value, but
we are definitely arguing overthat there is value.

(19:14):
And that's why we call it kindof value to the holder, that
there is value of the incomecoming into me and me operating
the business.
Um, but there's also, but youknow, we pull market comps and
we use market comps thatrealistically, if you want to
get right down to it, you may ormay not know if that was a

(19:37):
strategic purchase, right?
So you're presenting a lot offinancial information of
companies who have sold othercompanies.
And in some cases, you know,like franchises, franchises can
be bought and sold by nonstrategic partners all the time.
Right?
Because you could just run, youcould, you know, you can figure

(19:57):
out and learn how to run aMcDonald's.
You can go to McDonald's you,right.
Or Chick-fil-A or any of those.
And you can kind of just be anormal person, have some money
invest in a franchise.
But when you go into some ofthese other worlds, you know,
like if you're going to buy anarchitecture firm, if you're
going to buy a, you know,something that's very specific,

(20:21):
you probably need to have someknowledge about that industry to
be able to be successful in it.
And that's the difficulty isseparating, which you don't want
to talk about, but separatingthat person from the company.
And what does that mean?
You know, does your state oranybody's state, I think those
are the questions that you haveto understand is does the state

(20:43):
that I'm working in and gettingdivorced in, have any rules,
personal Goodwill and companyGoodwill, or enterprise
Goodwill.
Um, and what does that mean inmy divorce?
You know, so those are, thoseare all big topics that it's
case it's state specific.

(21:03):
Um, but yeah, I think we've,I've fought a lot of different
battles in court.
Um, and some of it is around thevalue of that main owner, you
know, how much income is comingoff of that business that
actually supports the family,you know, and how much is going

(21:23):
extra into the value of thebusiness.
So you're always, you know, andthat's another concept that we
call the double dip.
Um, you know, so there's a lotof these things that if you are
a business owner and you aregetting divorced, that you
actually do need to be aware of,um, because you can't, and I
hate to say this, cause I knowmiles, you are very smart in

(21:46):
this space, but you can't justtrust that your attorney knows
all the nuances of businessvaluation.
And, and even as an expert, Ifall into that, you know, I'm
like, well, you guys do this allthe time.
You, you guys know, and they'relike, no, we don't.

Right.
And what I wanted to share withyour audiences is what I want to
do when I'm, cross-examining abusiness valuation expert or
taking that deposition.
I want to put them on groundthan I'm comfortable yet.
Okay.
How do I do that?
Number one, I love talkingstandard of value.
Okay.

(22:26):
Because general economic andbusiness understanding isn't
proprietary to CPAs, a businessvaluation experts.
Okay.
Second, I love strategicpurchases as a defense to a big
number.
Okay.
I just li I just, I go the nightbefore trial, I'm just, I get to

(22:50):
go back and reread Shannon Pratton strategic purposes, but I'm
like, yeah, I can't wait.
I'm glad to talk about thatbecause there's not that much
written because it's just acheck Mark of you.
Can't include it.
Now, if they say that there'ssome, I would be shocked if you
could go out and find me somestate law specifically

(23:12):
discussing the need to eliminatestrategic perp, uh, purchases
from the consideration, whichobviously you can't get into a
comps.
Okay.
So that's a good, another goodvalue place for me to bring the
topic to me, the double dip.

(23:33):
I mean, here, here's somethingstupid.
I love asking just randomly inthe middle of a cross
examination of an opposingexpert or thrown in, in if I can
get away with it, which often Idon't, it's just, well, isn't
that a double dip?
Didn't you just admit a doubledip mr.

(23:54):
Or mrs.
Expert, and then you can seetheir eyes go.
What, you know, it's somewhat ofa non-sequitur, but you could
argue that anything's a doubledip.
And the reason is because lifeisn't neat and clean, especially
in the minds of a judge, unlessthey're, uh, have an MBA for

(24:15):
more assets, debts, owner'sequity, income, expense, profit,
you know, th for a CPA they're,they're completely separate well
in a divorce.
They're really not because I gotfour ways to get cash for the

(24:35):
non-business owner spouse.
I got property division, I gotalimony, I got child support and
I got attorney's fees.
All right.
So if I pull cash out, if I canpull out enough cash almost, I
don't care where it comes from.
All right.
So just be in the more moneythat a spouse gets for the
business valuation, arguablythere's less need for long-term

(24:58):
support.
So my job as a lawyer is towhile on one side is to avoid
the double dip.
The other side is to grab asmuch of a double scoop of 31
flavors as I can yet.
So all these are great issues.
And what I want your businessvaluation experts to know is the

(25:20):
better they are able to handlethese type of esoteric prompts.
And the other thing I would sayis, do you want a battle over
standard of value?
Because most judges, I knowaren't big fans because they
don't have anything in Tennesseelaw to help them on that.

(25:41):
And so you end up into aneconomic discussion with an
expert on the other side,essentially trying to take as
much strategic value as possibleimbedded in the valuation.
So I know that's a long rambling, uh, answer to a very simple
problem, but the, but the key towrap it up here is where can a

(26:05):
lawyer play and argue with avaluation expert?
Last thing I want to do is getinto a battle over discount
rate, just don't all right, butthat's a great place to go have
a battle, but that's going to bebetween the experts, not with

(26:27):
me.
Does that make sense?

Oh yeah.
It makes sense.
Well, and you, and you've talkedabout standard of value and some
other, um, issues, and, and wemight go a little bit more into
detail of those, but what do youthink divorce attorneys just
don't about business valuations.
Like you said, you don't want totalk about the discount rate.
And, and I would say just tostart it off, I think any time

(26:53):
you are in front of a judge andyou are going down a pathway of
a very, uh, minute valuationtheory and, and the only
difference in the two experts isvery convoluted, esoteric
theory.
You're going to lose everybodyinvolved, right?

(27:14):
Nobody's going to understand thenuances of that discussion, but
are there any areas that youthink traditionally divorce
lawyers just don't understandabout business valuation?

And again, we're talking about the vast
majority.
Well, there are plenty oflawyers that I know through the
ABA and in Tennessee that arevery, very competent in business
valuation.
So we're, we're not talkingabout the top tier folks that
are very comfortable in thatenvironment.

(27:49):
All right.
So the first thing that I thinklawyers don't get is they don't
understand the concept ofdrivers.
Okay.
A driver is very, a very simpleconcept and that every business,
if it exists for longer thanfour or five years has some
driver.
Okay.

(28:10):
If you're a, uh, if you sellmuffins, I love muffins.
My wife won't make me muffins.
I'm very upset over that.
At 30 years of marriage, I'veonly had muffins like two times
a month.
Why can't I have muffins everyweek?

(28:30):
I work hard.
All right, well muffins and the,um, no cupcakes.
He had everybody sit in acupcake, same thing.
So if you make that your driversgoing to be advertising through
social media in 2020, that'syour driver, okay.
Maybe you got a spot on, uh,bakeries or us on the food

(28:52):
channel or something.
And you're milking that forevery ounce that you can get it.
There are drivers to everybusiness for the personal injury
attorneys.
That's one thing advertising.
Okay, that's it.
You can be the nicest guy andnetwork all you want, but at the
end of the day, who's spendingthe most on advertising.

(29:12):
All right.
So once you get into a businessvaluation, the attorney on each
side has to know what is thedriver for this particular
business, all right.
Neck.
And that folds into yourGoodwill argument.
And I was kind of joking withyou about Goodwill.
If you want to get into it, wecan.
And there's a couple of conceptsthere.

(29:33):
You may want to flag and comeback.
Oh yeah.
Lawyers don't understand is thatCPAs have an business.
Valuation experts have veryspecific definitions for words,
that don't necessarily matchwith state case law.
All right.
So you could have a stateappellate series of appellate

(29:55):
opinions using the phraseprofessional Goodwill and what
the court of appeals in Missourimay think that word means has
nothing to do with what's inShannon prance books.
Cause why?
Cause the appellate judges have,you know, they should be

(30:15):
listening to CPAs and have ustell them exactly what to write
down, but they don't do that.
Alright.
Uh, the other thing is attorney,these don't are not going to
understand the ins and outs oftechnical issues.
Actually, I think that could bequite positive and divorce

(30:35):
lawyers going like, well, whywould that be positive?
Because she wants your expertfighting the other expert on the
technical issues.
Fine.
Unless of course your expert isgoing to get drilled by much
beef, your expert, who's betterin the courtroom, right.
Then you're just doing the bestyou can with what you got.

(30:56):
Okay.
Cause there's nothing, nothingworse feeling is when you've got
a, a C list business valuationexpert on the stand.
And, uh, that w that BV expertwas chosen by your client and
not by the lawyer.
Alright.
And then just getting drilledand saying that I told you we

(31:17):
should've hired the guy that was10 times more expensive because
I would've saved you$500,000.
All right.
Now, so then when you're talkingabout the difference between two
reports, what is the coredifference that matters now?
I think you could, in mostbusiness valuation reports where

(31:41):
, where the parties aren'tterribly apart, I'm not talking
about where it's 1 millionversus 12 million.
I'm talking about 1 millionversus 3 million.
I wouldn't even consider thatterribly far apart.
Okay.
In terms of, uh, materialitywhat's, what are the drivers?

(32:02):
What are the main things thatcauses those different?
And it may only be three items.
It could be discount rate comps,something else who knows.
But the point is lawyerssometimes struggle with
understanding that the coreconcepts aren't that complex.
And then, uh, so that is what Isee most business valuation

(32:30):
engagements falling down and thetrouble is I, this is going to
sound weird.
I enjoy business valuationdisputes with other lawyers who
understand business valuation,because we could talk, I get
somebody who this is their firstor second case on it.

(32:50):
I got to, I want to force him togo to some lectures from some
business valuation experts thatsay, Hey, uh, no.
And even if, even if we got oneat, let's say 2 million and the
other one had 3 million, whyMike said might make sense for
both parties.
You just split the differencebecause everybody, again,

(33:15):
there's a misunderstanding ofthe preciseness, just because
we're taking it down to onenumber a$2.5 million valuation
when the experts are two andthree may not make a budget of a
difference depending oncashflow.
Okay.
Does that make sense?
All right.
So that's, that's a, again, aclassic miles Mason rambling

(33:38):
answer to what otherwise shouldbe a simple question.

Well, I think it presents a bunch of good
information though, because Ithink that, you know, I've given
presentations before that thereare a handful of things that you
need to understand about abusiness valuation, that the
income approach is about riskand cashflow.
You know, what is the cashflowthat has happened in the past?

(34:06):
What's the future cashflow andwhat's the risk that cashflow is
going to continue.
Um, and then it's understandingthe nuances of how to describe
something in a little bit easierway.
Um, I think that, you know, mostof the time, I'm not as an

(34:27):
expert there to ed, you know, soI get to posed by an attorney
that may not understand thenuances of valuation.
I really can't sit there andeducate them.
Like I can't even, you know,like I can just sit there and be
like, that was not the questionyou wanted to ask.
Cause I know that you got yourterms mixed up, but I'm going to

(34:49):
have to answer that question.
And so a lot of times I thinkthat attorneys really attorneys
have a harder time saying thatthey don't know something.
Right.
And so that, cause they don'twant to admit to anybody that
they don't know it.
And so then it, you know,whereas I flip around and I say,

(35:09):
you know, I'm the expert, I'm Iknow that you are really smart
miles, but here's how I've doneit in the past.
And I just say, okay, here's allthe things we need to be mindful
of knowing that there's going tobe maybe one or two things out
of the 10 that you are like, Oh,I didn't think about that.
Right.
Um, but it also

That that's nine out of 10 thing.
I promise.

I don't, I don't think so.
I think people understand partsof it.
It's just the nuances.
And if you don't understand thedrivers, if you don't understand
how something is making money,how do you know how to value it
is, is one of the problems.

And I think it's a good place to go in your
attack against a businessvaluation expert, which I've
settled some large cases becausemy opposing at deposition, I'll
try to nail down the opposingexpert.
We just did this valuation.
What's the driver.
And they can't answer thequestion.

(36:15):
How does the phone ring for thisbusiness to work?
And, uh, so that's, uh, I got, Igot three other things just to
throw out that if you wanted togo into number one, uh, divorce
lawyers don't understandreporting standards from the CPA
.

(36:35):
Uh, in my book, this is a not sosubtle plug for my book, a
forensic accounting desk book.
I go into the weeds aboutreporting standards.
Uh, lawyers don't know what usepap is and AI CPA record keeping
or requirements, great groundfor deposition questions.

(36:57):
After you've issued a subpoena,do just take them for the expert
to bring their file and all thenotes and, uh, information in
there.
And I cover that, but alsodocument and just good old
fashioned document retention,most business valuation experts.
If you got them at the, on thestand are taught just to say,

(37:19):
well, I follow use pap and CPArequirements, but you get them
under some details about that.
How long do you keep documents?
When, how do you decide what totoss before Depot?
All right.
What did you read?
But didn't use in yourvaluation.

(37:41):
Okay.
Especially when you've got yourexpert looking at two or three
data points that they exclude itfor whatever reason.
So I love to get businessvaluation experts off there,
especially early on in thedeposition and ask them, do you
have a document retentionpolicy?
They'll say yes.

(38:02):
And they'll start rambling onabout use pap and CPA, which a
CPA says in the litigationenvironment.
None of, uh, the, uh, thestandards apply because it's
litigation.
They just accepted all documentretention and disclosure and

(38:25):
report formatting, which isstupid.
And most of the businessvaluation experts that are
A-listers comply with it.
Anyway, even though they knowit's accepted out, they don't
want to get drilled in adeposition or the courtroom for
not following standards, eventhough it doesn't apply, which
is weird, but that's a differenttopic, but no one has a document

(38:48):
retention policy in writingright now.
Even if you got your onebusiness valuation expert with
an assistant, uh, I still wouldrecommend having one item,
number one, comply with FCPAstandards.
Number two, comply with USPAP,but three have specific lines

(39:11):
about what is retained and whatis not to be thrown away.
Okay.
Because what is one of the trapsI want to get the expert ID to
is that they cherry picked whatinformation to bring to the
deposition and into thecourtroom.
Right?
And without that documentretention policy, I said, well,

(39:31):
how do I know?
How do I know what you've thrownaway?
I put the, I try to move theburden of proving the negative
to the business valuationexpert.
Now, does that always work?
No.
Is it always helpful?
No, but what if I got nothingelse?
And that's what most business,most attorneys in the family law

(39:54):
universe are pretty good at isif I got nothing else to argue
attack, and these are the areasthat I can attack on.
And your job as the businessvaluation expert is to know what
the obvious attack is plannedfor it.
And the fun taking is all youneed is one pager and say, yes,

(40:15):
we have a document retentionpolicy it's written down.
Do you want me to send it toyou?
Yes, I do.
Thank you.
And it's not a complicateddocument retention policy, but
it, yeah, unless it says, um, ifit does say I keep what I relied

(40:37):
upon, the implication I'm goingto go after is you're the
arbitrary of what you reliedupon, which means you're the
arbitrary, what document youkeep.
So it becomes a little bit of avicious circle, but I liked that
circle if I got nothing else.

Hm.
Well, and I think from theexpert side, you know, there's a
lot of things that go intoprotecting myself from notes,
um, getting into it from emails,getting into it.
And mostly it's about beingupfront with the clients.
From the beginning.
Everything you send to me is, isdiscoverable everything that you

(41:17):
send to me, you know, like, yes,there are protections in place
that protect work product andthings like that.
But more often than not, I seeattorneys subpoenaed the, uh,
the emails that you had back andforth and more often than not,
these couples are gettingdivorced for the first time or
maybe the second, but they'renot really being careful.

(41:42):
Right.
You know, that could have beenwhat got them into this in the
first place.
But with the communications withme, as long as I kind of put a
kibosh at the beginning and say,listen, there will be no
communications with me.
There will be no, Oh, I wishthis value or$5 million that
would work really well for me.
Like I can't have any of thatcommunication to be entered.

(42:06):
Um, because regardless ofwhether, what if my number was
already 5 million and now I havethis email sitting out here,
that's like, I wanted it to be 5million and you made it 5
million.
And, and that's how it works.
So I'm really upfront witheverybody at the beginning that,
you know, email communicationsnot going to happen.

(42:26):
Um, but that's same breath we'redocumenting and keeping
everything that would besubpoenaed.
Now we've, we've ran into otherexperts that have on, you know,
uh, deposition said that theydid get rid of documents and
they did destroy documents andhad no problem saying that
information, which I think iscrazy.

(42:48):
But, um, you know, they didn'tthink it was a big deal.
And usually those people haven'treally been doing a ton of work
in this space or else.
I don't think they would makethose type of errors, uh, of
whether their errors of judgmentor not.
Um, you know, it just doesn't,we are not advocates.

(43:12):
You know, I think that that'sone thing that clients don't
quite understand is yourattorney is gonna fight for you
no matter what, if you think thesky is purple, they are gonna
fight for you to make it purple.
I'm going to come in and say,you know, the sky is not purple,
right?
Like I get that.
You guys want to fight that it'spurple, but in you understand

(43:32):
that it's blue right now, youknow?
And so I'm really coming in alittle bit differently as an
expert and saying, here's what Ibelieve is the truth or the most
reasonable value.
Right.
Um, but it doesn't always makeeverybody happy.
So I think that those are someareas that, that, you know,

(43:54):
people just don't understand.

Right.
I think it was very interestingwhat you were talking about,
especially with documentingclients, suggestions of the end
result, they can't help it.
Right.
Yeah.
And just so that you don't getless than subtle plug for my
book.
And one of my, uh, appendix, Ihave a sample set of deposition

(44:19):
questions for forensicaccountants and business
valuation experts.
And in that I asked the samequestion, 14 different ways.
Did the client suggest avaluation male at any point
during the engagement and thendid the client's attorney

(44:41):
suggest and as a switch upwords, but I keep asking the
same question, 14 different waysto get at that, especially if
they haven't turned over theiremail yet.
And that anytime I can get adownside for the other side to
disclose something that gives meleverage in the negotiation,

(45:03):
whether I know it or not, whichis fun.

Well, and I write a lot of the deposition
questions for the other expert.
I usually write part of mydirect, um, I'll write some of
the ideas of cross-examinationquestions that I think we're
going to get into.
Um, because a lot of times, mostof the time, I, I just tell
attorneys, you know, it couldtake you like 10 hours to do

(45:29):
this.
And it might take me like anhour and a half or two or three,
you know, like it's not going totake me as long because it's the
same stuff.
But part of the fun is kind ofwalking them down the path in
the deposition when they'redeposing, the other expert is
like, how do you walk them downto kind of hang themselves?

(45:51):
Um, and there are areas invaluation that are subjective,
but then there are other areasthat are just like not approved,
right.
You know, um, a discount rate of40%, probably not going to
happen unless you have somestartups situation or something

(46:11):
like that.
So I think it's, it's helping.
And then normally the attorneysthat I work with will come in
and kind of layer theirquestions on top of mine.
Um, I work for a lot of businessowners and you know, a lot of
times in control men that havebeen doing this for a long time.
And one of the initialconversations I have with them,

(46:34):
either in person or via zoom inthis timeframe, um, is before
they write me a check beforethey sign anything to work with
me is I tell them upfront, youwill not decide what the value
is.
And they're like, but, but Iknow, but I know that I know
what it's worth.
I can tell you right now, okay.
There are experts that you couldwork with that will work with

(46:56):
you like that.
And you can tell them what priceyou want and they'll go and do
it.
I said, but the moment you thinkyou're in control of this
situation and we fail, whichmeans I present a value that is
not defendable.
Okay.
Cause I can't make you succeed.
I can't win or lose a case.
I'm just coming in to provide adefendable valuation.

(47:19):
But at the point that youinterject yourself into it and I
listened to you and I failbecause you don't, you think,
you know it more than I do, thenwe both fail.
And so I usually have taken aproactive stance of, I'm going
to tell you the truth, whetheryou want to hear it or not, that
may, may, may get you to settle.

(47:40):
Right.
But it's always going to be, um,that I'm in control of that
because I'm putting myself onthe stand.
I'm having to answer thequestions.
And if a question comes in, likehow the heck could you value
this at 5 million?
And I don't have the answer.
You're going to look like anidiot business owner.
I'm sorry, but that's how itgoes.

(48:01):
So I th I think that in thisspace, though, experts are kind
of made and they can be toldwhat to do, or you kind of
create your own reputation thatyou can't be told how to do it.
Um, and that's, that's a bignuance with an expert and I've
told many young experts, youknow, um, you can go and work

(48:21):
for attorneys that will use you.
Um, but it will be once.
And once they know they can use,you they'll know that you could
be used on the other side, youknow, so this is, this is a long
view of what could happen.
And I, I, don't always just end,you know, I mean, I'm sure it's

(48:42):
the same in Tennessee, as it isin Missouri.
Everybody talks, attorneys knoweach other, the experts know
each other.
We all know each other's workand you, you gain a reputation
based on what you do or don'tdo.
Um, but anytime a business ownerthinks that they're going to
come in and create the value,the, the interesting nuance.

(49:04):
And maybe we can talk a littlebit about this because it'll,
it'll have to do with a lot ofthese concepts, but I can see
the story from the financialsbefore a word is spoken.
And so then I have to go on thestand, you know, so I can see if
a business owner is doing thingsthat kind of, when they decided

(49:28):
they wanted to get divorced,right.
Because I can see it.
And I think that it's the samewith, if you look at like
criminals who steal, likethere's ways to steal, we can
see those, we can see thosepaths.
Um, and so you're not reallynecessarily getting away with
much, but I think that we cantalk a little bit about, you

(49:51):
know, maybe what happens to thebusiness during a divorce, what
in the business owners, youknow, so it's not just about
tanking the business, right?
It's about what did thefinancials tell the story that
now you, as the business ownerare going to tell a conflicting

(50:13):
story, and then the other sideis going to make sure that
everybody sees that thosestories don't intertwine.
So what have you seen kind ofhappening, um, as business
owners try to run theirbusiness, a divorce, um, you
know, another concept is whatare the ways that they hide
assets in a divorce?

(50:34):
You know, cause this is whatwe're seeing.
More often business owners don'tthink that everybody can see it.
Um, but we can, and that's in a,in a sophisticated judge can
also see it.
And I think that's where, um,you know, no, one's no one's
getting tricked in this process,but what do you see as some
common ways that they kind ofhide assets in the divorce or

(50:57):
how they operate the business,

Right?
So, uh, you touched on severalgreat points.
First of all, uh, what I try toexplain to clients, one of the
main values of hiring a forensicaccountant is they could perform
a what's called a smell test.
All right.
And I explained to him thatwe've seen as CPAs, we've seen

(51:21):
so many balance sheets, incomestatements, tax returns, that
it's not that complicated of aprocess to start out with a
smell test, which I call atechnique underneath the
umbrella of methodology.
Okay.
And we could talk more if youwant to get a technical
definitions of that, but simplyjust spreading out number of

(51:44):
years of balance sheets, incomestatements, attacks turns to
cross-reference.
And what there is in a divorceis some magic moment.
If we're going to find somebodyhiding assets or manipulating
financials, there's going to bea point in time when the target,

(52:06):
the business owner and thebusiness begin the process of
planning.
Now that beginning of theprocess of planning for divorce
can be as much as a decade inadvance.
We ain't catching that.
Okay.
They're just too good.
There are some people out therethat are very sophisticated, not
that I've ever represented them.

(52:27):
Right.
Of course.
All right now, but that magicmoment where the business owner
knows that a divorce is comingor suspects, it is going to
begin changing decisions aboutasset acquisition,
capitalization, other things,and CPAs are great at that, but
it's helpful to know from theclient, when did things start

(52:50):
going South?
When did she suspect therelationship with the, with the,
uh, uh, secretary, whatever.
Right, right.
Now, what we see in a divorceoften is, uh, uh, I didn't coin
this phrase, but I use it in mybook, sudden income deficit
syndrome also known as SIDS.

(53:11):
So once the divorce is coming,income is always going to drop.
All right.
And it's so common that when my,I represent clients where the
income's going up and you'relike, Oh, we don't that weirdo.
So, uh, yeah.
So sudden income deficitsyndrome is up to two expect to

(53:32):
tell the client it's all right.
If you're representing thenon-business owner.
All right.
Let's talk about ways to hideassets.
All right.
So I spend a big chunk of mybook talking about hiding assets
and what are the most commonways, the number of ways of
doing it is rather infinite.

(53:54):
Okay.
Uh, it could be, if I want tohide some assets, one of my
favorite tools is going to be atrust because trust, pay their
own taxes.
All right.
So none of those assets aregoing to show up on a tax
return, either on a depreciationschedule or some other type of

(54:15):
amortization.
That's gonna result in a number,uh, on a schedule.
All right, second, I'm going totry to bury non-operating assets
in the business because they maynot show up for years.
And if we don't depreciate them,you know, you may not even get

(54:37):
them off the tax return.
And if we could get two, threeyears and only have two in a
divorce, give up three years oftax returns, as opposed to five
or six.
And we started a planning byputting non-operating assets in
the, uh, in the business andjust letting them sit there.
Okay.
That's a great way to do it ifyou have time, uh, because if

(55:00):
you think about it and what, uh,I actually give pros and cons in
my book for differentstrategies.
All right.
So if you start manipulatingreceivables, that's a real easy
place to go.
So one of the things I did whenI was an accountant is I worked
for a hospital holdingcorporation and the big number

(55:22):
to adjust at the end of the yearfor management bonuses was
uncollectable receivables.
Okay.
They could make adjustments atthe end of the year, so that the
profitability would be exactlywhere they wanted it to be.
All right.
So, uh, I liked that as an areato look at, uh, obviously, and

(55:44):
Melissa, I'm assuming you'vetalked about this a million
times on your podcast, and ifyou have it, this would be a
really good topic to cover withother forensic accountants is
putting, uh, the, uh, extramarital affair person on the
payroll.
Okay.
Paying their health insurance,uh, maybe paying their rent, uh,

(56:07):
Carly's other things as anoutside sales person, something
like that.
So the fictitious employees, abig one, uh, usually your, your
bookkeeper in the firm may be agreat, uh, uh, deep throat to
have, uh, on your side.
Or maybe if there's one personwithin the business owners

(56:29):
business that has to know andmust know about hiding assets,
depose them, make them commitperjury as part of the process.
All right.
There's, there's love.
And then there's perjury.
So somebody can love thebusiness owner.

(56:49):
And I don't mean that in aromantic sense necessarily, but
somebody has to know, because ifit's, if we're talking about a
real business, it's usually toobig for the business owner to
just take enough cash off book,because, okay, let's say you do
get paid in cash.
All right.
Where are you going to put it?

(57:10):
Do you have it in the safe, atthe house where the wife, cause
I saw him put a hundred thousanddollars in that safe and there's
no cash at the time of thedivorce.
And I saw it as recently as fourmonths ago, judges will listen
to that.
Okay.
But if you need to park realmoney, like quarter of a million

(57:31):
dollars to$2 million in cash,they're going to need and want
to get it off shore.
All right.
And there's a finite number ofways to get it off shore one is
physically take it.
All right.
There's a lot of people thatwatch Miami vice in the 1980s,

(57:53):
it was let's get on a boat andgo to the Caribbean.
All right.
But do you really want to becarrying around a bag of a
quarter of a million dollars ofcash?
Right.
Most people don't.
The other thing is, uh, mostpeople are gonna have a stash of
cash.
But the question, what I alwaystell my clients is, I don't know
where we want to look for asafety deposit box, two States

(58:17):
over with$25,000 in cash in it,juice probably worth the
squeeze.
And I say, yeah, that's probablywhat he's got.
And he's probably got somewalking around money that he can
use, or she can use at a casinoor Vegas or something like that.
So the way to hide assets islimitless.

(58:37):
And one of the more subtle waysthat I do find fascinating.
And I think a lot of lawyers aregonna miss this is overpaying,
federal income tax.
Okay.
And so you fill it outincorrectly on the joint return

(58:59):
as far as how much was paid in,but only, you know, it's there,
you tied in with your socialsecurity number and in future
years either go back and, uh,Amanda return, cause maybe after
the separation, both parties domerit, uh, married, filing
separate.
And if a business owner's doingthat, there's usually going to

(59:19):
be a reason.
Okay.
But I love the idea if I weregoing to hide assets and uh, why
would I have only been marriedfor 30 years?
And I'm pretty sure my wife hasan account in Switzerland
somewhere.
I just don't.
I just hope it's a lot moremoney than I could possibly
imagine.

(59:41):
Uh, good for her plus, uh, she'sthe legal administrator in my
law firm.
So if she steals money, it'sall, it's all marital property.
So it's 50% off anyway.
Right.
But uh, if you're going to hidemoney, uh, off of tax issues,
you can go back and file theamended return 18 months, two

(01:00:03):
years later, and put the correctnumber in there.
And the IRS is going to look atbecause it's an error in your
favor.
They're not going to, they'renot going to worry with it.
If, as long as you got thepaperwork, Oh, I sent that, uh,
uh, found the check that wentinto the IRS or series of
checks.
And I just forgot to tell my CPAhere's the canceled check.

(01:00:27):
So the amended return iscorrect.
And, and I think that would bea, if you've got a business
grossing, couple of mil that's,that could be a really good way
to hide.
And then of course I'm a big fanof 3% here, 5% there, maybe 6%
here, 4% there on differentitems on the balance sheet

(01:00:51):
before, you know, it you'retalking real money.
So cash is super easy.
Uh, but that's where you need totwo things.
You need this forensicaccountant to catch what changed
and did it coincide with thenon-business owners, private
investigator catching, uh, thebusiness owner, having dinner at

(01:01:15):
a fancy hotel in Vegas, at theconference, okay.
To where that shift is, or, uh,better yet.
Uh, you can prove spendingthat's inappropriate for the
amount of income, you know, thebrand new luxury vehicle, the

(01:01:37):
brand new condo, where you'rejust spending crazy money as the
business goes down and judgeswill really listen to that.
And those are the simple waysto, to catch the most common
ways of hiding assets.

Melissa Gragg (01:01:52):
Well, and I think that most of the time, the
person that's not in thebusiness is always hyper
mistrustful of the person that'sin the business.
So everything looks suspicious.
And unfortunately, even simplethings like, you know, most
people look at the tax returns.
Most people look at the businesstax returns.
They look at their personal taxreturns, um, distributions from

(01:02:16):
other entities that maybe peopleown do not hit the tax return.
And so distributions would be ona K one and you could have the
number there, but it doesn'tnecessarily mean that that
income was collected or, or putas a line item on the tax

(01:02:37):
return.
So to me, you know, cause I'llhave a lot of clients that are
like, you know, we've beenliving this great life.
How do we have nothing?
Well, in some cases you've beenliving a great life because
you've financed it through debt.
But then in other cases, it'sjust that there was this other
money coming in fromdistributions.

(01:02:59):
It just doesn't look like it onthe tax return.
Um, and so one of the thingsthat we'll look at and say,
okay, well, why don't you getthe last?
And usually I want it tocoincide with a tax return.
So right now we may have 2019tax returns.
Let's get 12 months of personalbank statements.
Let's get 12 months of businessbank statements.

(01:03:21):
And then let's just look at themand say, do these Al add up, are
we seeing where the cash iscoming from?
Are we seeing where the cash isgoing?
Because sometimes we do, youknow, there is a trail that
there was 200,000 in this bankaccount and now there's nothing.
Okay, well, when did it leave?
And then what we do is we try tokind of layer those accounts by

(01:03:43):
time.
So in this timeframe, you hadall of these different accounts
with amounts, but we had a totalof 500,000 and now everything
got moved around.
And now at the end of that year,we still have the 500,000.
It's just a different makeup.
Or we have 200,000 left.
What happened to the 300,000?

(01:04:04):
You know?
So sometimes it's identifyingthat there is, or is not a
problem at the beginning andthen saying, okay, we see that
there is a problem.
There was more money here andnow it's lower.
Um, so what happened to it?
Did you just spend it because alot of times people don't
necessarily know how muchthey're spending and so there's

(01:04:27):
so much mistrust and they'relike, well, I need a forensic
accountant or, you know, likeyou can even get a CDFI right
now.
So a certified divorce,financial analyst, I need
somebody, I need a lifestyleanalysis, like all of these
things, but the reality is youhave to take it slower first.
You can't just go down everyrabbit hole because a client

(01:04:49):
thinks that something was lostor stolen.
Or my husband's a fee for mywife's a thief, you know,
because some things don't alwayslook as they seem, so you do
have to go low and we just tryto take it in stages and say,
okay, let's first.
See if there's a problem.

(01:05:10):
And then let's see, what is thebest use of our time?
Like you said before, you know,are we missing a hundred
thousand over here and 500 overhere?
Well, let's go after the 501stbefore we even worry about the
100.
Um, and then there's alsotactics that valuation people
can use.
An experts can use to try to getit to settle.

(01:05:32):
You know, we had a situationonce where there were a lot of
high dollar items and I can'tsay exactly what they are.
I would give it away, but let's,let's, let's call it diamonds.
We'll go with that one.
So we had some diamonds and someenrolls and maybe it's a diamond
distributor.
Okay.
But what happened is that, andthis won't totally work with

(01:05:55):
what I'm doing, but each of thediamonds had a code.
And so we could see that some ofthe codes came in, but they
never left, but they were gone.
Right.
They were never sold, but theywere gone, they were missing.
And so we provided an, and thiswas a massive company.
We provided an inventory list of40 items that were missing and

(01:06:20):
that in one given year.
Right.
And it settled the followingweek because we had identify,
you know, so a lot of times it'sworking smarter, not harder.
It's if you can identify, andthis goes kind of way back to
your value driver, but in acase, what is driving the value
of that marriage and what is themost bang for your buck?

(01:06:42):
And how can we in some capacity,as an expert, I'm always working
to try to settle it, you know,to try to get you enough
information that you can settleit because it does get sticky.
You know, you're paying twoexperts and they're fighting
about every single thing.
Well, if you can find someinformation, um, it might help

(01:07:03):
get it settled because you'veidentified that yes, those
diamonds existed and yes, theywere, they went somewhere else.
But what the bigger issue isthat we had identified was that
the person was trading thediamonds for other assets.
And so we were able to identifythat the, yes, those other
assets didn't show up, but thediamonds and the missing

(01:07:26):
inventory numbers allowed us tounderstand that there were
assets somewhere else we justdidn't have.
So it allowed us to settle.
And in some cases there, youknow, another issue that we
could talk about is that, uh, um, you know, sometimes you don't
need it to know everything to beokay with a settlement.

(01:07:49):
And there are times, you know,I've, I've had clients that have
said, I will ignore$60 millionworth of value in, in some crazy
business or some, you know,crazy outlandish things that's
happening because they hadenough to survive or they had
enough that they thought wasfair.
Um, because again, sometimeswe're trying to get to equitable

(01:08:12):
distribution, right?
We're getting to something thatis reasonable.
I like reasonable better thanfair.
Cause that's just my thing.
Cause nobody's ever going to sayit's fair, but is it reasonable?
And is it enough to provide foryou so that you have to do have
to fight for everything?
Um, but the, you know, I think,I think that those are some

(01:08:32):
other issues that people, youknow, people think I mistrust my
spouse, so I need to turn overevery stone and that will cost
you sometimes more than what thestone is worth.
And so you really have to bemore, um, conscious, I think, of
where the value is and how doyou get it?

(01:08:55):
Because going back to our firstconversation, our first point is
that, you know, how w even withthis ballot, marital balance
sheet, or, you know, whathappens to the business during
the divorce, the reality issomebody might keep the business
and somebody might keep thehouse.
Are those equal maybe, or maybenot is one going to continue to

(01:09:19):
make money and the other one,not.
Yeah.
You know, so there's a lot ofthings that it does it feel good
to have a house that you live inand you don't have to pay for
it.
Yes.
But is that the same value as abusiness and an operating
business or something that'sgoing to create more money for
you?
You know, those are, I thinkthat if you're getting divorced,

(01:09:40):
you have to surround yourselfwith a team of people that
understand it deeper than justnumbers on a balance sheet.
Basically.

Miles Mason, Sr. (01:09:51):
I agree.

And we're done.
No, just kidding.
Um, the, one of the things thatI thought we would share one
more, um, one more topic, andthen I think we'll get into like
what you do and your book.
I definitely want to talk aboutyour book, but if a lot of
people I think are in thissituation, and I've seen a lot
of ways to protect this, but howdo you protect a family business

(01:10:17):
from divorce?
Because I think we have a lot ofclients that are in this
situation.

Whew.
All right.
So first step is getting anestate planner involved.
Uh, obviously postnuptialagreements, prenuptial
agreements, but estate plannersmight have some creative ways
to, to, uh, uh, cut corners.

(01:10:44):
Uh, well, I wouldn't say cutcorn.
I would say cut crust off ofBrett.
Okay.
Do we place the family businessin a trust?
And if so, who's the trustee.
Is it the business owner?
Not always a good idea to havethe business owner as a trustee
of the trust that they own,because the claim can be, there

(01:11:05):
is yeah, they can access it,they can control it.
And it's a sham transaction.
All right.
So you always have be worriedabout, uh, you know, a
transaction being, uh,considered by a court to be
fraudulent.
So a fraudulent conveyance issomething all divorce lawyers

(01:11:27):
should understand and keep intheir arsenal.
Now, uh, there's tax planningthat you want that in a, to fold
that into because generally yourtax planning and your divorce
planning are going to go hand inglove.
All right.
Now, keep in mind a businessowner is most likely to have to

(01:11:50):
produce a financial statementsgiven to credit facilities.
All right.
So one of the things I call theHoly grail of documents in the
divorce is I'm going to go lookto see if the business has, uh,
open credit, open lines ofcredit, or have borrowed money

(01:12:12):
based on inventory.
If they have, then there'susually going to be some sort of
filing in the register's officewith a business entity that the
title of the name of thecompany, not the DBA, but the
name of the company with theirsecretary of state is, uh, uh,

(01:12:35):
reachable through public record.
So if I get a, um, what's calleda UCC one, and if you're a
divorce lawyer, you need to knowwhat a UCC one is.
And that is a document filedwith the register's office in
your County that tells the worldthat the credit facility, it

(01:12:57):
could be a bank or some otherform of lender has superior
rights to assets owned by thebusiness.
Right?
And, uh, those are great tohave.
So if you get the Holy grail,these financial statements, but
if you want to protect yourfamily business from divorce,
you want to have very realisticvalues on those financial

(01:13:22):
statements that can bediscoverable at a bank by your
spouse's crafty divorce lawyerand their subpoena power.
Okay.
So, uh, in terms of protectingthe, Oh, the other thing is buy,
sell agreements, okay.

(01:13:44):
And people screw this up all thetime.
Almost every state says, if youwant to buy, sell agreement
between two people to protect.
And one of the main reasons isobviously protect a business in
the event of a divorce.
If there's an automatic trigger,the only way it's enforceable as
against the spouse is that ifthe spouse signs it, but if

(01:14:07):
you're doing it at the sametime, as your planning, some tax
planning and, uh, lifeinsurance, okay.
I love life insurance,especially premiums purchased by
the business.
You can say, dear, I'm doing my,we're doing our state planning.

(01:14:28):
The business is paying for a oneto$10 million life insurance
policy.
So five die tomorrow.
Tom can take over the businessand write you a nice check.
But Tom says the businessesworth X.
I would say the business isworth X, and we need you to sign

(01:14:48):
here.
Do you want to take you to alawyer?
So I'm like, no, I trust you,but that never happens.
Right.
And spouses rarely sign thebuy-sell agreement.
All right.
And if you, uh, have you had achance to, to make Chris Mercer

(01:15:08):
out of Memphis before?
Okay.
Well, Chris has written severalbooks on buy, sell agreements.
Okay.
And by the way, in case youdidn't know, he's a very, very
nice man and would, uh, would,would definitely be somebody
good to call on and just talk bycell.
Okay.
So the buy sell agreement is avery common stop.

(01:15:31):
Uh, not a terrible stop, butjust know you gotta get the
other spouse to signature on it.
Okay.
And you might want to give thema big wad of cash as a thank you
for signing it, because they'regoing to think, well, I'm just
getting taken to the cleaners aspart of this process.
Well, if you hand them 50,000 incash and say, this is your
separate property for signingthis document and it's tax

(01:15:54):
planning, one of the, you know,whatever, but there.
And so the question is, howcreative do you want to get?
How aggressive do you want toget?
Do you want to keep it where allthe documents look and smell
right to a forensic accountantor an opposing divorce lawyer,

(01:16:18):
or you don't care.
You're a bull in the China shop,but I'm going to do a through Z
regardless of the consequencesand park half a million dollars
in cash down in, uh, Aruba.
You know, so, so really there'sa lot of options available to

(01:16:38):
hiding cash and a lot of optionsout there in terms of doing tax
planning and asset protection.
And so what I always tell myclients and try to explain when
I speak in public, you've got onone hand, you got a tax planning
and asset protection.
On the other hand, you got, uh,uh, fraudulent conveyances to,

(01:17:04):
uh, protect assets and they'vebeen a divorce.
And it just depends on which ofthe coin you're looking at.
Okay.
Because the same transactionscan perform more than one
function at any given point intime.

And the reality is a lot of family businesses.
If you look at a high net worthfamilies, right, that have kind
of either had businesses that gothrough the generations or have
been gifted in some capacity toother generations, their estate
planners are, and, and, um, uh,state attorneys, estate planning

(01:17:41):
attorneys basically are on-pointbecause they, their whole thing
is really to protect all of thegenerations from kind of
diluting the wealth to divorce.
So I even had a couple that, youknow, I think the wife wanted
the multi-million dollar house,and it was a bad day when we

(01:18:06):
went in and said, so the familytrust owns the house and you
guys don't, and not even thehusband owns a house.
And she was sorta like, what,how did that work?
You know, so there's a lot ofways that I think somebody, but
a lot of it's pre planning, it'splanning before you got married,

(01:18:28):
it's planning, you know,generational skipping trust and,
and other types of sophisticatedprograms that it's not on the
Eve of filing divorce, that youcan typically just create these
things to happen.

Right.
I think an important concept tooverlay whether you're, whether
you're the, uh, representing anobligation or their obligation
on alimony, the less assets aregoing to get the greater, the
claim for alimony, which unlessyou do a postnup or prenup is
usually going to be asignificant number.

(01:19:05):
So it's all, as I like to say,it's all cash cash cash.
So be careful what you ask for,if you don't have assets to give
though, and if you're talkingabout an ultra wealthy, or we're
talking about liquid assets andExcel in excess of 30 million,
well, the dollar amount that areasonable person needs to have

(01:19:30):
a comfortable lifestyle withoutthe support of the other party
begins at 3.5 million.
And so what I see, and we cantalk about that later, but what
I see is on the, the largerStates, there is no alimony
because of the asset buyout,because there's not going to be
any need, unless they have somekind of extravagant lifestyle

(01:19:55):
and, uh, explain to a judge thatthey need access to the NetJets
to go to New York, to shop everytwo months.
Yeah.
Good luck with that.
Right.
Right.

Well, and I think that it's a lot, you know, a lot
of times the spouse has justlistened to what the other
spouse says.
So if they say, Oh, you know, Iwas given this business by my
father.
I was, you know, this existedbefore we were even married, you
know, all of these things, thereality is you have to talk to
somebody and, and, and kind ofstart to break apart the layers,

(01:20:31):
you know, was it truly gifted?
Was it truly separate to beginwith, even if you have separate
assets where they did, theyremain separate where they
commingled, where they, youknow, convoluted into something
else.
And then what's the process offiguring that out.
And then you have to layer onthat it's different in each
state.

(01:20:52):
So it doesn't mean just because,you know, and, and, and then
some cases, you have people thathave multiple residences.
So what state is going to be thebest state to file in, you know,
do you have that capability ofchoosing, or does it have to be
where your main residence, youknow, so all of these things I

(01:21:12):
think are, are nuances, but mostof the time one spouse is
listening to what the otherspouse says.
And I gotta be honest, I'venever met a business owner that
doesn't think that theirbusiness is worth more than it
is worth.
You know, so they've spent twodecades telling the spouse, Oh

(01:21:33):
my gosh, we're so popular.
We're so famous.
You know, we're so successful.
We were making all this and nextyear is going to be better and
better and better.
And then they get divorced andthey're like, it's all going to
hell.
You know, the problem is thatsometimes it was probably going
to help during a lot of thatperiod anyway, you know, and,
but as the business owner,you're just hyping yourself up

(01:21:54):
and hyping the business up.
And so some of that mistrust iskind of not necessarily founded
in logic, you know?
So this process is reallydifficult, the only way.
And that's why I think I have alot of clients that come in and
say, I want you to do all ofthis analysis.
And we say, okay, but is thatgoing to move the needle?

(01:22:16):
You know, is that going to getyou to where you need to be?
And really most of the time theattorney and the expert need to
figure out the couple best waysto get to the end result, um,
because not all of them aregoing to be helpful.
So, but it's not always too easyto protect.

(01:22:37):
And we have a whole bunch ofother topics.
We might just have to do anotherpodcast at some point, but is
there anything that we didn'ttouch on that you think would be
beneficial for people tounderstand?

Well, I would never underestimate the ability
of a forensic accountant andbusiness valuation expert to
smell problems.
Okay.
Part of what clients don'tunderstand that they're paying
for is a tremendous amount ofprofessional experience and

(01:23:10):
expertise and judgment, right?
I don't need to tell a businessvaluation expert that knows what
they're doing to double check,uh, the tax returns and the
compare them to the financialstatements to see if something
pops out that looks wrong.

(01:23:30):
I don't need them to, uh, Idon't need to say out loud, at
least I hope I don't to look at,uh, reimbursed business expenses
from the owner and the people inthe owner's inner circle.
Okay.
Because if I'm a business owner,I may go buy something, an asset

(01:23:52):
non-operating asset from my bestsalesperson during the divorce,
just to depress income and maybeuse all the section one 79
depreciation that I can to justtake it all in, uh, as a
deduction in the year the dollarwas spent.
So, yeah, there's just a lot ofobvious places.

(01:24:14):
I think most forensicaccountants and business
valuation experts know to looktravel and entertainment
conferences last five years,they've had a trade show in Las
Vegas and they spent eight to12,000 every year.
And then we got one for 25,000,well, somebodies getting, uh, a

(01:24:39):
sky box at a strip club for 10grand at a, a night or whatever
it may be that may be low.
I don't know.
I've never bought a sky box at astrip club in Las Vegas, but I
know people who've been there.

I've had clients at that when I met them for the
first time.
They're like, so is part of thisconfidential, like, can I, can I
have you sign a confidentialityagreement?
I was like, okay.
You know, like, what's the deal?
Well, so we have some expensesthat are client related, but
they may be a little bit, youknow, on the, uh, wrong side of

(01:25:17):
reasons.
Okay.
No, I just tell them, don't talkto me about those types of
things, but yeah,

That's part of doing business a lot of times,
especially in the constructionindustry.
Okay.
So, uh, that doesn't make itwrong.
It just makes it questionable.
Alright.
So where I'm going with that isI think there it is our job as
the professionals to explainwhat we're supposed to find.

(01:25:48):
Okay.
What we're looking for, when yousay we're not going to do
everything, flip that and say,here's what we are going to do.
We're going to compare andcontrast financial statements
from the business, from the tax,the tax return statements and
the, uh, the, the financialstatements that were provided to

(01:26:10):
the lending facility to see ifthey all come together.
And, uh, an a credit facilityhas got a long-term relationship
with the business.
Isn't going to freak out if thebusiness claims$500,000 worth of
income on a tax return and 2million on a financial
statement.
They're just not because they'vegot a long history and they

(01:26:31):
understand the complex nature oftextures versus real income.
So, uh, I think it's a, it's amajestic exercise is what I like
to tell people that what we dois part art, part science, and
they have to hire somebody thatthey trust on the science before

(01:26:55):
we get to the art.

Hmm.
Yeah.
And I think that you can reachout to most experts and they'll
do kind of, you know, you calledit a certain thing.
We kind of call it like a quickand dirty or a look, see, like,
look and see what we need to do,or if there's value here or not
value, because sometimes thingslook like they're not worth

(01:27:18):
much, but there's some, somearea, you know, like just the
section one 79 depreciation thatyou're talking about that can
make a business look like it'smaking nothing very easily.
And so you kind of have todissect it and get a little bit
deeper to see if you actuallyhave any issues there or not.
And then how do you go forthfrom that position?

(01:27:42):
And, and we're constantly tryingto get to a settlement, not
because we don't like litigationbecause we actually do like
litigation.
Um, but because it's in the bestinterest of the parties, because
at some point you're going tojust have two experts fighting
in front of the judge and noteven, I mean, we don't really
fight.
We just present our positionsand they're different.

(01:28:03):
And the judge has to decide, butthe judge, a lot of times could
split the baby and just averagethem and say, I'm just going to
go in the middle.
Well, isn't that something youcould do in negotiating a
settlement and say, Hey, you'reover here at 3 million.
I'm over here at 1 million.
How does 2 million sound?
And they, you know, everybody'slike, well, you know, we're just

(01:28:23):
playing around with money andaverages and going in the
middle, but that's what couldhappen in court.
And so we're just kind of, youknow, trying to, to, to cut to
the chase.
But I think if you're a millionsof dollars apart, you know, is
one of the positions beingcontrived or not.
And that's where I think it, itreally is in the best interest

(01:28:46):
of the attorneys to understandmore about business valuations,
because you could be kind oftricked by the valuation person,
you know, like we, we know whatyou don't know and what you do
know, but presents us to a goodpoint about your book and kind
of some of your background.

(01:29:07):
So if you could just tell us alittle bit more about your
background and about this book,because I actually think this
book would be really helpful toattorneys and valuation people
and experts because you need tosee a bunch of different
perspectives.

Well, thank you.
Uh, so my book is called theforensic accounting desk book.
And with your permission, maybeyou could put a link, uh, it's
cur currently in its secondedition, it is sold by the
American bar association, familylaw section.
So somewhere circa 2008, afriend of mine, uh, that was on

(01:29:50):
the publications board of theABA family law section, uh,
said, Hey, I want to buy youwhiskey sounds good.
So we go have a whiskey.
Then we get on the secondwhiskey and she lowers the boom
on me.
We want you to write a book like, uh, what I said, well, you

(01:30:12):
know, about forensic accountingand business valuation, you're a
CPA.
I'm like, yeah, we want you towrite the book for the ABA
family law section on forensicaccounting and to some extent
business valuation.
Okay.
And it, it, it bothered me thatwhat I was about to do would be

(01:30:40):
lose almost two years of mylife.
Okay.
And I was at, do you know whatyou're asking?
Yeah, we do.
And then the only reason I didit is because it would me off if
somebody else wrote it.
All right.
So, u h, said yes.

(01:31:02):
U h, one, u h, one of manyinteresting decisions I've made
under the influence of alcohol.
Okay.
That h as impacted my life.
I won't give you a list, but Ihave a list of order importance
and alphabetical order ofquestionable judgment of
exercise under the influence ofalcohol.

(01:31:24):
So I had a pretty good place.
I'd been teaching businessvaluation and forensic
accounting for about 10 years.
I'd been working with N akba, I'd been working with a CPA.
I was the, u h, u h, liaisonbetween t he CPA, a forensic
evaluation services group andABA family law section.

(01:31:45):
And, uh, so I felt like I had agood handle on it.
And also know what forensicaccountants don't know about
lawyers and vice versa fromhaving taught both.
And I, what I routinely do isask them questions while I'm
giving seminars.
Okay.
So I know that AI CPA, forensicaccountants don't know about the

(01:32:11):
different ethical requirements.
It can't list them as far asrequirements for independence.
Okay.
They don't know, they just knowif it's an audit client, you
can't do a forensic accountingreport.
Okay.
Whatever, but I could ask themspecific questions about their
own ethics and they won't knowthe answers.
Okay.

(01:32:32):
And I learned that from, forconferences and ACPA
conferences.
All right.
So, um, I pulled all my stufftogether, uh, bought a bunch of
cigars and, uh, went to type it.
Okay.
And really just started out, uh,you know, blank thing, chapter

(01:32:57):
one, uh, what a forensicaccountants do.
And I had fun with it.
Uh, I do occasionally find a CPAwho reads it and finds it
remotely humorous and calls meup or emails me.
Like I say, a CPAs are in lovewith spreadsheets.
There's, there's a romanticrelationship there.

(01:33:18):
That is a also ordering on thespiritual, uh, forensic
accountants and businessvaluation experts like to tell
the public and their friends andprivate that they don't have
typical, boring CPA personality,but they do so.

(01:33:41):
And I know that because I'm theson of a CPA, I'm the brother of
two CPAs and I'm a CPA.
So I've been around forensic,the forensic accountants.
Think I'm crazy.
The divorce lawyers, they come,the most conservative board
person they've ever met.
So I have no home, which isfine.

(01:34:02):
Uh, Steven Wright said, uh, Ilive in my own little world, but
that's okay because they know methere.
Right.
All right.
So I had fun with it and what itwas, it was an endeavor to be a
translator.
Okay.
What can I tell both CPAs andlawyers that would add value?

(01:34:22):
Where were the dark corners ofthe forensic forensic accounting
universe?
Right.
That's a great place forcross-examination.
And so I did things like I wentto, uh, an NAC VA conference,
teaching forensic accountants,how to deal with cross
examination.

(01:34:42):
And I spent a whole week theredoing one thing.
The chapter that I wrote on adeposition questions, your
deposition question checklist.
I worked on it for a week andflew to now I do love Orlando,
but it was like Orlando inAugust.
I don't know why they had inOrlando in August, but then it

(01:35:03):
was 10 30 at night.
I'm out trying to smoke a cigarwalking around and I'm just
dripping in sweat.
I was like, I don't think everwant to move to Orlando.
All right.
So, um, a lot of effort wentinto it.
And then, uh, they came backaround a couple of years ago and
said, we want you to update it.

(01:35:25):
And it was like, I don't want todo that.
I said, well, you have to said,I don't have to do anything.
It's America because it'sAmerica.
I thought it was America.
And they said, no, we want youto do it.
So I went and added some stuffand added, like, I didn't think
I would have that much, but Iended up adding like 150 pages
to a lot of cases, case lawsummaries to give forensic

(01:35:47):
accountants and lawyers an ideaof what is out there and
appellate opinion.
So I went and I especiallylooked at all appellate opinions
that had come out of theprevious 10 years, that since
had written the book and updatedit, that had anything of
interest, if it was just aboring case and had a forensic

(01:36:09):
accountant, and I'm not going todo that.
But if we hit a battle betweentwo forensic accountants or some
noteworthy, you put it in thebook.
So that was, I thought that waskind of a nice value.
Add it.
Now the book is, uh, one of thebest selling books in the
history of the ABA family lawsection.
And for that, I'm very proud andgrateful for the ABA doing it.

(01:36:31):
And forensic accountantteachers, forensic accounting
teachers around the country haveused this as their textbook to
teach forensic accounting,because we go into methodology,
we go into techniques, we gointo, what is the smell test?
All right.

(01:36:52):
We go into ratio analysis.
We go into the technical aspectsof what forensic accountants
need to know and how to explaina methodology in the event there
on the stand, which mostforensic accountants, unless
you've been on the stand four orfive, six times, it's near
impossible to explain themethodology o r what i s, what

(01:37:15):
does every forensic accountantdo?
First financial statementscompared to tax returns, c
ompare to what was reportedeither publicly or privately to
a bank and see where thenominees are, then do it over
time.
Right?
When was the magic moment whenwe found out about the
girlfriend?

(01:37:35):
Well, you can add 18 months onthat because there's probably
going on four, but that's adifferent story.
So just starting out smellingwhat's there, looking at it from
a critical 10,000 foot view isstep one of the methadone.
Okay.
Now, so we, we wrote the bookand when I say we, one of the

(01:37:59):
things I was very proud of wasall the help I got from my
friends.
I did a little bit of a TomSawyer.
There's a Missouri reference foryou.
Uh, you know, I've got to painthis fence, but I w I called my
buddies and said, Hey, can Iborrow this for me?
Can I borrow that from a, cangive me a quote on this.
So a lot of the, uh, uh,forensic accountants and lawyers

(01:38:24):
sided on, they're just friendsfrom the ABA family law section,
as well as some of the topforensic accountants that have
know through a CPA and NAC VA.
And, uh, cause what I would do.
And nine times out of 10, when Ilook at an article, let's say, I
need to write a topic on stockoptions.
Okay.

(01:38:45):
And I don't want to write a bookon ABA already.
Well, I dunno if they had one atthe time, but when I did my
second edition, there wasalready a book on stock options.
So as I see the book, but I ranacross a great article from a
forensic account in New Jersey,uh, called him up, said, Hey,

(01:39:05):
I'm going to be referencing thisarticle.
Can you give me a couple ofquotes about stock options did.
And so I feel like it was agroup effort of a lot of nice
people being very generous withsome of their thoughts and, and
material.
And so I try to hope and my goalwas it was everything of a

(01:39:27):
divorce lawyer or a forensicaccountant might need to know
about the technical aspects offorensic, accounting and
divorce.
One of the chapters has had towrite how to create a marital
balance sheet.
What's the information you need.
And one of the tests, uh,Melissa, next time, if you, if

(01:39:50):
you wanted to really throw ashot across the divorce,
lawyer's bow and say, okay, yourclient has, uh, has an interest,
uh, with his or her spouse for avariable annuity.
What documents do you need toreview?
All right, well, I wonder to putthat in there.

(01:40:13):
So I, to call CDFs, I get totalk to some, some, uh, you
know, cause some that said that,you know, there's a con there's
an annuity contract, right.
What else do I need to know?
Surrender penalties.
All right.
So there's, I wanted it to be achecklist at practice tool, a

(01:40:36):
way that any lawyer, uh, can'tlive without.
And so I know I've done a goodjob when I get to go back to my
old book and I got subpoenas inthere.
I got a, um, I tried to make, itwas really knowing, had a, uh,
opposing counsel.
That's just a jerk, just aterrible human being.

(01:41:00):
As many divorce lawyers are.
And we all know that, but heissued a subpoena to an employer
, uh, of my client.
And I liked, I liked thesubpoena.
So I stole some of it andimproved my subpoena.
It was hard for me to, uh, ofcourse I never told the lawyer,

(01:41:20):
thank you.
Or gave him credit because Idon't like, but the point is
forms, practice procedures canall get better with time.
Right.
And so I really enjoyed thatprocess of trying to make it
better, uh, for the second goaround.
It's sold really, really well.
I'm excited about it.

(01:41:42):
And it really contains like,like we were talking about
earlier, give it away.

Yeah.
Well, and it just came out thisyear or is it, is it coming?
Cause you have the updatedversion now,

Right?
Yeah.
Second edition is out throughthe ABA in available from the
ABA family law section.
It will be for sale on Amazon,mid 20, 21.
And UVA likes to have theirbooks exclusive for a while.
And uh,

And it's not just for Tennessee, it's really
talking about these divorceconcepts for anybody around the
country.
And then you need to, you needto make sure you know, your own
state.
Right.
But these are universal.

Yeah.
And I try to tell you where togo look in your state law,
whether it be rules of evidence,rules of civil procedure,
generally, most States, almostall States follow federal rules
of evidence and federal rules ofcivil procedure when it comes to
internal referencing.
So your expert witnessdisclosure is going to be

(01:42:51):
different in federal court thanstate court, but States have
their own rules.
And, but they're not thatdifferent in order to lose any
sleep over.
Like there is a differencebetween whether draft reports
are discoverable at the federallevel.
The answer is no in most statelevels.
The answer may be, yes.

(01:43:13):
The question is, does a draftreport really help you out
answers?
Maybe who knows?
Right.
So you definitely want to askfor them and try to get them.
Even if the other side doesn'tknow how to bury them.
Oops.
Did I say that out loud?
I didn't mean to, you know, uh,so, uh,

Now do you think the book would be okay for
people who are just gettingstarted in this area too?
Or do you kind of, is it morefor a seasoned person?

It's for both?
I gave what I, what I tried todo is, you know, think of if
it's a neat, uh, you've gotmuscle, which is the law bone,
which is forensic accountingbecause the numbers and we're
talking about numbers.
What I wanted to do is give thisbook, uh, enough of the

(01:44:03):
connective tissue to bring itall together.
So I'm going to start simple.
I even go into how to call aforensic accountant or a
business valuation expert out tolunch.
That's where I start and say,why you need to have a forensic
accountant or business valuationexpert on speed dial to do your

(01:44:23):
job.
Okay.
You do not want to wait.
You want it.
We, we race several otherdivorce firms here in Memphis to
get the expert our client wants.
Right.
And to make sure that we're notlosing out now.
Um, so we do, we take it to thatlevel, as well as specific

(01:44:45):
deposition questions, teachingthe lawyers and the forensic
accountants, what are the ethicsbehind the, the special
engagement that is forensicaccounting or business
valuation, and to teach themthat there are rules and they're
written down and where to go getthem.

Yeah.
I think it's a great referencefor anybody because you know, a
lot of times we're staying inthe books just for valuation
people.
And I think you really have tounderstand where an attorney
comes from an attorney'sperspective because we're not
really just working in our ownworld.

(01:45:27):
We have to go then andcommunicate all of this
information to the other world,which is the judges, the
attorneys, the clients.
I mean, a lot of times I'mtrying to hold somebody's hand
through this process becausethey've never dealt with
anything financial related andthey're in their marriage or in

(01:45:50):
life, you know?
So then to just, you haven'teven kept a checkbook to then
assume that you're going tounderstand the nuances of, you
know, separate or maritalcontribution or any of these
terms is really a far stretch.
So we have to, as experts, lookat how other people perceive our

(01:46:14):
knowledge and other peopleperceive how we communicate the
issues.
Because if you sit up there incourt and say, well, assets and
liabilities and equity, it's notgoing to get you anywhere
because people, those termsdon't resonate with people.
You know, instead of saying thethings that you, you possess,
you know, you own, and then thedebt that you got to pay for it.

(01:46:36):
Well, people understand thatpeople understand I get a car
and a car loan.
Do you own the car yet?
Nope.
Do you have a car?
Yep.
What's the difference?
That's the amount that you havereally right.
And they're like, Oh, I getthat.
Well, part of that isunderstanding how other people
perceive what you say.
And I think that is anothergreat reason to reach out and

(01:47:00):
get this book.
Um, we're going to list links ofhow to contact you as well as
how to purchase this book.
You said it was on the ABAwebsite.
I did see it on there.
Um, I did see that Amazon isposting that it is available in
2021.
So that's why I was asking.
I was like, it's out.
Right.

(01:47:21):
Um, so that makes more sense,but it's going to be a great
resource.
And um, if they have any otherquestions and I think, you know,
miles, we should do like aregular thing.
I think, you know, this would befun, the attorney's perspective
and then like the rationalperspective.
No, just kidding.
Just kidding.

(01:47:44):
Well, thank you so much.
It's been an amazing amount ofinformation.
And again, we'll give all thecontact information to how to
reach out to you.
Um, I assume you take on newclients and people can call and
email you.
Um, you have a pretty, you, it'snot just, you, you have a bigger
firm, um, in Memphis, right?
And so you have several otherattorneys working for

You.
Um, so,

And any other specialties or is it

Family law, but mostly just divorce their
items within family.
It made sense to work with otherattorneys and we'll be glad to
steer people in that direction.

Gotcha.
But basically your focus is onfamily matters, divorce,
custody, things like that.
So, yes.
Well thank you so much.
And we look forward to seeingyou again.
All right.

Hi.
Thank you for having me.

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Business Valuations from a Divorce Attorney’s Perspective

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