Forensic Accountant & Business Valuation Expert for Virginia 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 Virginia 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 Virginia is heard in the Circuit Court of the county or city. Federal matters are heard in Virginia’s two federal judicial districts — the Eastern District and the Western District. Mr. Friedman is regularly engaged in matters in states across the United States, as well as in international matters, and the firm accepts Virginia 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. Tracing, normalization and appreciation 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.

Why the Burden of Proof Drives the Analysis in Virginia

Most states ask whether a gain on separate property was active or passive. Virginia asks the same question but assigns the proof differently, and that changes the engagement.

The owner has to prove the gain was passive

The non-owning spouse carries the first step: showing that contributions of marital money or personal effort were made, and that the property increased in value. Once that is shown, the owning spouse bears the burden of proving that the increase, or some portion of it, was not caused by those contributions.

The practical effect is that an owner cannot simply assert that the market did it. The passive portion has to be demonstrated — which means separating what the asset would have done on its own from what the owner’s work added. For a brokerage account that is a comparison against market and sector performance over the holding period. For a closely held business it is considerably harder, because the owner’s labour and the enterprise’s performance are entangled by design.

“Personal effort” is defined, and the definition is broad

Personal effort in this context covers labour, effort, inventiveness, physical or intellectual skill, creativity, and managerial, promotional or marketing activity applied directly to the separate property. An owner who ran the business, made the decisions, or drove its growth has supplied personal effort — so the argument rarely ends at whether effort existed. It moves to how much of the appreciation that effort produced, which is a quantification question.

Significant effort, substantial appreciation

The statute does not capture every trace of involvement. The personal efforts must be significant and must result in substantial appreciation. That makes the size and timing of the appreciation part of the evidence, not just its cause — and it means the analysis has to measure the increase across the right period rather than reaching a conclusion about causation alone.

The court cannot hand over separate property

A Virginia court has no authority to divide or transfer separate property, or marital property that is not jointly owned. What it can do instead is grant a monetary award, payable as a lump sum or over time in fixed amounts. That raises the stakes on valuation specifically, because the outcome is a dollar figure rather than a transfer of the asset itself — and a dollar figure is only as sound as the valuation underneath it.

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 Virginia law.

Forensic Accounting and Litigation Support

Active Versus Passive Appreciation Analysis

Quantifying how much of an increase in a separate asset is attributable to market forces and how much to a spouse’s efforts — built to carry the burden Virginia places on the owner, with the method and the benchmark stated so both survive cross-examination.

Separate-Property Tracing

Following an inheritance, gift or premarital asset through the accounts and entities it passed into, identifying what remains attributable to it, and documenting the path together with an honest statement of where the records run out.

Business Valuation Disputes

Valuation of closely held businesses for marital dissolution, 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 Virginia, very often including whether a passive-appreciation opinion measures anything or simply assumes the market explains the gain.

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 business was mine before the marriage. Is its growth safe in Virginia?

Not automatically. If marital money or your own efforts contributed to the growth and the value rose, the increase can be treated as marital — and the burden of showing that a portion of the increase was not caused by those contributions falls on you as the owner. That is a quantification task, and it is the reason this analysis exists.

What counts as “personal effort”?

Labour, effort, inventiveness, physical or intellectual skill, creativity, and managerial, promotional or marketing activity applied directly to the property. It also has to be significant and to have produced substantial appreciation, so involvement alone is not the end of the question.

How do you prove an increase was passive rather than earned?

By measuring what the asset would have done without the owner’s involvement and comparing it to what it actually did — against market or sector benchmarks for investments, and against the operating record for a business. The method and the benchmark both have to be stated and defended, because both will be attacked.

Can a Virginia court give my spouse my separate property?

A Virginia court cannot divide or transfer separate property. It can grant a monetary award instead, payable in a lump sum or over time. So the exposure usually arrives as a dollar figure rather than a loss of the asset, which puts the valuation at the centre of the case.

Which court hears a divorce in Virginia?

The Circuit Court of the county or city.

Can a Florida-based expert work on a Virginia 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?

Statements or valuations for the separate asset at or near the date of marriage or acquisition, and currently; account statements for the full holding period; and for a business, tax returns and financial statements, the general ledger in native form, bank and credit card statements and payroll records. Date-of-marriage values are the item most often missing, and reconstructing them is part of the work.

What credentials should a financial expert in a Virginia 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 Virginia 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.