Forensic Accountant & Business Valuation Expert for Tennessee Matters

Working With Out-of-State Counsel

Joey Friedman, CPA, P.A. is a litigation-focused forensic accounting and business valuation firm engaged by counsel in Tennessee matters. The firm is based in Florida and works nationwide, handling records-based analysis remotely and traveling for deposition and trial testimony as a matter requires. Mr. Friedman has testified in state, federal and foreign courts, for plaintiffs and defendants, in civil, criminal and marital proceedings. The firm does not prepare income tax returns and does not provide tax planning services.

Divorce in Tennessee is heard in the Chancery Court and in the Circuit Court. Federal matters are heard in the Eastern, Middle and Western Districts of Tennessee. Mr. Friedman is regularly engaged in matters in states across the United States, as well as in international matters, and the firm accepts Tennessee engagements in state and federal proceedings alike.

Retaining a forensic accountant from outside the state is common in financial disputes, and in some matters it is preferred:

• Conflict distance. An out-of-state expert is less likely to have prior or ongoing relationships with the parties, their businesses, their banks or their other advisors.
• Records-based work travels. Valuation and earnings analysis are performed on documents and data. The location of the analyst does not change what the records show.
• Independence is visible. Where the parties move in the same local professional circles, distance from those circles is easier to explain to a finder of fact.

The Three Things That Decide a Tennessee Case

Growth on separate property turns on whether each party contributed

Tennessee starts with two presumptions that decide where the work begins. Property acquired during the marriage is presumed marital, and a party claiming otherwise must show it fits the statute’s definition of separate property — which includes property owned before the marriage and “property acquired in exchange for property acquired before the marriage.”

Then the provision that generates most of the financial work: income and appreciation on separate property count as marital “if each party substantially contributed to its preservation and appreciation.”

Read the word “each.” It is not enough that the asset grew, or that the owner worked on it. Both parties’ contributions are in issue, and “substantially” is a matter of degree that only evidence can settle.

That makes this a documentary exercise on both sides: what went in, from whom, over what period, and what the asset would have done untouched. Separating growth that came from the market from growth that came from money and effort supplied during the marriage is the analysis, and it is the same work whichever side asks for it.

Tennessee counts what the divorce itself cost — and which estate paid

Most states treat legal fees as a separate application. Tennessee’s property-division factors include them directly: “the total amount of attorney fees and expenses paid by each party in connection with the proceedings; whether the attorney fees and expenses were paid from marital property, separate property, or funds borrowed by a party; and the reasonableness . . . and necessity of the attorney fees and expenses paid by each party.”

Every clause there is a question about money, and two of them are tracing questions. How much each side actually paid, and which estate the money came out of — the marital pot, one party’s own property, or borrowings that are themselves now a liability.

This matters more than it first appears. Fees paid from marital funds are, in substance, both parties paying; fees paid from separate property are not; fees paid from borrowing leave a debt someone will carry. Following that money through the accounts is ordinary forensic work, and in Tennessee it speaks to a factor the statute names rather than to a side issue.

Equitable is not equal, and the factors are not a checklist

Tennessee’s appellate courts are explicit: “an equitable property division is not necessarily an equal one.” Courts should reach an equitable division by “considering and weighing the most relevant factors in light of the unique facts of the case.”

So the value of an analysis lies in which factors it actually speaks to. A report that addresses every statutory heading at equal length spends most of its weight where the case is not. One that identifies the two or three factors the facts turn on, and supports those thoroughly, is doing what the court is directed to do.

The classification questions underneath this are questions of fact, decided on the evidence put before the court — which is where a documented record earns its keep.

Personal versus enterprise goodwill

Where a business depends on one individual, part of its value may not transfer to a new owner. The firm calculates and separates the transferable value from the non-transferable value and documents the basis for each. This is a financial calculation, not a legal determination — how that split is treated is a matter for the court under Tennessee law.

Forensic Accounting and Litigation Support

Separate-Property Appreciation Analysis

Separating growth that came from the market from growth that came from money and effort supplied during the marriage, and documenting what each party contributed — the evidence behind Tennessee’s two-sided “each party substantially contributed” test.

Source-of-Funds Tracing for Legal Fees

Establishing how much each party paid in fees and expenses and which estate the money came from — marital funds, separate property or borrowings — a question the statute puts among the property-division factors.

Classification and Exchange Tracing

Following property acquired in exchange for pre-marriage property through the accounts, which is what rebutting the marital presumption requires.

Complete Asset and Interest Identification

Establishing what actually exists before anything is valued — entity interests, deferred and contingent compensation, receivables and interests in trusts or estates.

Business Valuation Disputes

Valuation of closely held businesses and professional practices for divorce, shareholder and partnership disputes and buyouts, including the normalization questions that decide most of these cases: owner compensation, discretionary expenses, related-party transactions and customer concentration.

Hidden Asset Tracing

Following money through business accounts, related entities and personal accounts to establish what exists and where it went — common in divorce and in partnership disputes where one side controlled the books.

Economic Damages and Lost Profits

Quantifying what was lost, on a method that survives cross-examination, and identifying where an opposing calculation departs from the records it claims to rest on.

Fraud and Embezzlement Investigations

Reconstruction of what happened from the underlying records — misappropriation, fictitious vendors, payroll schemes and diversion — documented so it can be presented to a court, a board or an insurer.

Rebuttal and Opposing-Expert Review

Review of an opposing expert’s report to identify method departures, unsupported assumptions and figures the underlying records do not support — in Tennessee, very often whether an appreciation claim addressed both parties’ contributions or only one.

Deposition and Trial Testimony

Expert testimony in state, federal and foreign courts, in depositions, mediations, arbitrations including AAA, and jury and non-jury trials, for plaintiffs and defendants alike.

Frequently Asked Questions

My spouse never touched my business. Is its growth still divisible in Tennessee?

The statute makes income and appreciation on separate property marital only if each party substantially contributed to its preservation and appreciation. Both parties’ contributions are in issue, and whether they were substantial is decided on the evidence.

Is property bought during the marriage automatically marital?

It is presumed marital. That presumption can be rebutted by evidence that the asset fits the statutory definition of separate property, which includes property owned before the marriage and property acquired in exchange for it.

Do legal fees really affect the property division?

In Tennessee they are among the listed factors. The court considers the total each party paid, whether the money came from marital property, separate property or borrowings, and the reasonableness and necessity of the fees.

Does the court have to go through every factor?

No. An equitable division is reached by considering and weighing the most relevant factors in light of the case’s own facts, and an equitable division does not have to be an equal one.

Which court hears a divorce in Tennessee?

The Chancery Court, and in some matters the Circuit Court.

Can a Florida-based expert work on a Tennessee case?

Yes, and it is common. The analysis is performed on documents and data, which does not depend on the analyst’s location, and the firm travels for deposition and trial testimony as a matter requires.

What records are needed to start?

Tax returns with every schedule, entity documents, and account and loan records. For a business or practice, the general ledger in native form, bank and credit card statements and payroll records. For a Tennessee matter, add complete account histories for any asset owned before the marriage — the contribution question can only be answered across time — and the records showing how legal fees were funded.

What credentials should a financial expert in a Tennessee matter hold?

For matters that may reach a hearing, the relevant considerations are accounting credentials, experience with the specific analysis at issue, and a record of testifying. Mr. Friedman is a CPA accredited in Business Valuation (ABV) by the AICPA and a member of the Association of Certified Fraud Examiners.

Discuss a Tennessee Matter

Joey Friedman is a CPA accredited in Business Valuation (ABV) by the AICPA, a member of the Association of Certified Fraud Examiners, with more than 25 years in accounting and forensic practice and an expert witness practice serving attorneys and litigants nationwide since 2014. To discuss whether the firm is the right fit for a matter — including scope, timing and whether an out-of-state expert suits the case — call 954-282-9615 or use the contact form. The firm accepts engagements in other states as well — see states served for how the analysis differs elsewhere.