Earning Capacity and Unemployment/Underemployment

The California Supreme Court defines earning capacity as “the income the spouse is reasonably capable of earning based upon the spouse’s age, health, education, marketable skills, employment history and the availability of employment opportunities.” Marriageof Simpson, (1992) C.4th 225, 14 Cal. Rptr. 2d 411. Due in part to the current economy, there exists a notable…

Epstein Credits: An Overview

In 1979, the landmark California Supreme Court case, “In Re Marriage of Epstein,” established guidelines for reimbursements of separate property payments (normally from post-separation earnings) on community property debt. As a customary rule, courts may reimburse a spouse if that spouse used post-separation earnings or other separate funds subsequent to separation to pay for pre-existing…

Evaluating Law Practices Involved in a Divorce Matter (Part 1)

The following is an excerpt from “Income Reconstruction: A Guide to Discovering Unreported Income,” published by the American Institute of Certified Public Accountants. It provides insight into how a Forensic Accountant would trace nondisclosed income in one particular type of business. Overview of Law Practices:Reporting Income It is important to understand how law practices account…