New Jersey Forensic Accountant Explains Calculating Alimony Using the Sanity Check

Video Transcript 

My name is Robert Bonavito, New Jersey forensic accountant. This video is part of a series of videos where I discuss forensic accounting topics for educational purposes only. If this was a litigated matter, I would take a different approach, add different conclusions based on different facts and circumstances.

Hi, my name is Robert Bonavito, a New Jersey forensic accountant. Today we're gonna discuss in our firm, in matrimonial matters, we usually do a sanity check on alimony. Now, I have to tell you alimony calculation is extremely complex and I'm gonna give you a sanity check that we use after divorce to see how we came out.

The factors that go into calculating alimony, are probably 30 to 40, but when it's over we use a sanity check which is a very simple calculation just to see if it makes sense. How we do it is, let's say we have a spouse one that's making $130,000 and spouse two is not working. So, what we'll do is impute a fair market salary to spouse number two.

Let's say that spouse two can go out and make $40,000. So, we'll take the 130 minus the 40 and we'll get $90,000, and that is the difference between what spouse one and two can make and then what we'll do is just divide it by three and that comes to $30,000. This number is usually pretty accurate in most divorces but if there's businesses, if there's investments and some other things going on, it can be way off but usually if you do this sanity check, it will give you a good idea the amount of alimony you would expect in a plain vanilla divorce.

My name is Robert Bonavito. If you have any questions concerning this video, please feel free to email me.