The Role of a CPA in Separate Property Tracing for Community Property States

In community property states, such as Texas, the division of assets during a divorce can be a complex and contentious process. In these cases, a Certified Public Accountant (CPA) who is experienced in forensic accounting and separate property tracing plays a vital role in identifying which assets a spouse can rightfully claim as separate property. In this blog post, we will explore the essential role of an experienced CPA in separate property tracing, with a specific focus on the regulations and practices in Texas.

Understanding Community Property and Separate Property

In Texas, the distinction between separate and community property holds significant importance during divorce proceedings. Community property refers to assets and property acquired during a marriage that are considered jointly owned by both spouses. Separate property refers to assets and property that are considered individually owned by one spouse. During a divorce, separate property will be allocated to the spouse who owns it, while community property will be subject to equitable distribution between both spouses. ​

Separate Property Under Texas Law

In community property states, the presumption is that all assets acquired during the marriage are community property unless proven otherwise. The challenge lies in accurately distinguishing between community and separate property during the asset division process. This can be particularly complicated if the assets have been commingled, or mixed, throughout the duration of the marriage. The burden of proof rests on the spouse claiming an asset as separate property, necessitating meticulous tracing and documentation. This is where a CPA experienced in separate property tracing under Texas law plays a vital role.

The Role of a CPA in Separate Property Tracing

When it comes to the intricate process of separate property tracing, it is crucial to choose a Certified Public Accountant (CPA) who is knowledgeable in this area. A CPA conducting separate property tracing serves as more than just an accountant. They act as a forensic expert, delving deep into financial records, transactions, and documentation to establish the origins and nature of assets. Their expertise and meticulous approach are crucial in meeting the rigorous clear and convincing evidence standard required in Texas.

​In addition to their accounting knowledge, a qualified CPA must be prepared to serve as an expert witness in court. There are various standards that must be met to be classified as an expert witness in a case, including credentials, experience, and knowledge of the law. An expert witness must be equipped to present their findings, opinions, and expert testimony effectively, providing a solid foundation for establishing the separate nature of assets.

Choosing the Right CPA

Choosing the right CPA for separate property tracing is a critical decision that can significantly impact the outcome of your divorce proceedings. It's important to select a CPA who not only possesses the necessary credentials but is also experienced in handling complex cases. When it comes to choosing the right CPA for separate property tracing, Larry Bradford stands out as a trusted professional with a proven track record.

Larry Bradford is recognized as certified in Financial Forensics and accredited in Business Valuations by the American Institute of Certified Public Accountants, designations few CPAs ever achieve. Having accumulated extensive experience in over 400 trial court proceedings, in addition to numerous depositions and mediation presentations, Mr. Bradford has established himself as an indispensable asset in the defense of separate property of all kinds. With his in-depth knowledge of Texas laws, forensic accounting skills, and experience as an expert witness, he is the trusted professional you need in your corner. Call 512-402-0049 or send an email to [email protected] to schedule an appointment.