From vocabulary to strategy

If you’ve read Terminology 101, you know the words. Now it’s time to use them. This guide provides specific questions to ask the three most important people in your carry journey — and explains why each question matters.

Questions for your spouse

These questions assume a cooperative relationship. Frame them as financial planning, not interrogation.

The essential five

“What is your carry allocation percentage?” — This is the single most impactful number. The difference between 0.25% and 1% can be millions of dollars. If they don’t know the exact number, “what’s the range?” is a reasonable follow-up.
“How many fund vintages do you have carry in?” — A professional at a fund for 8 years might have carry in 3-4 vintages. Each one is a separate position with its own timeline and value.
“Is the waterfall European or American?” — This determines when carry gets paid. European = more conservative, later payments. American = potentially earlier but with clawback risk.
“Have we received any carry distributions?” — If yes, check your bank statements and K-1s. Distributions received are concrete evidence of carry value.
“What’s the GP commitment, and how much have we funded?” — This is money from your family that’s invested in the fund. It’s relevant for cost basis and household cash flow.

Deeper questions (if the relationship allows)

“Which portfolio companies are performing best?” — Names like “Stripe” or “Databricks” are public; asking about them isn’t asking for confidential information.
“Are any companies approaching IPO?” — IPOs trigger the largest carry distributions. Knowing the timeline helps with financial planning.
“Have your carry terms changed recently?” — Promotions, fund restructurings, or new vintages can change allocation percentages.

Questions for your attorney

Your family law attorney should be able to answer these. If they can’t, consider whether they have sufficient experience with alternative investment assets.

“Have you handled cases involving carried interest before? How many?” — Carry cases are specialized. An attorney who handles 3-4 per year is experienced. One who has never seen carry will learn on your dime.
“What discovery can we request for fund documents?” — K-1s, capital account statements, carry allocation letters, quarterly reports, and the LPA are all potentially discoverable. Your attorney should know which to request.
“What valuation methodology will you recommend?” — NAV-based, DCF, or secondary market? Each has trade-offs. Your attorney should have a preference and be able to explain why.
“Do we need a forensic accountant, and do you have one you work with?” — For carry over $500K in estimated value, the answer is almost always yes.
“Should we pursue a lump-sum division or distribution tracking?” — Lump sum = clean break. Distribution tracking = ongoing financial relationship. Each has implications your attorney should explain.
“What’s the typical timeline for a carry-involved case in our jurisdiction?” — Carry cases take longer because of valuation complexity. Set expectations early.

Questions for your forensic accountant

A forensic accountant specializing in carried interest is your most valuable team member. These questions help you evaluate their competence and guide their analysis.

“What data do you need from me, and what can you source independently?” — A good forensic accountant will tell you exactly what documents to gather and what they can research on their own.
“How will you value private companies in the portfolio?” — Listen for: multiple methodologies (comparable companies, precedent transactions, DCF), sensitivity analysis, and honest uncertainty ranges. Be wary of single-number precision.
“What discount rate will you apply for illiquidity?” — Standard range is 20-35%. If they say 50%, they may be advocating for one side. If they say 0%, they’re ignoring a real factor.
“Can you explain the opposing expert’s methodology if they disagree with yours?” — The best forensic accountants can articulate both sides clearly. This matters in mediation and trial.
“How do you handle unrealized carry vs. realized distributions?” — Realized carry (already distributed) has certain value. Unrealized carry (still in the fund) requires estimation. The methodology for each should differ.
“What’s your fee structure, and what’s a realistic budget?” — Forensic accountants bill $400-800/hour. A carry analysis might cost $15K-50K depending on complexity. Know the range before you commit.

Questions you should be asking yourself

“Do I understand the magnitude of our carry position?” — Are we talking about $100K or $5M? This determines the appropriate level of professional engagement.
“Have I gathered all the documents I have access to?” — K-1s, tax returns, any fund correspondence. See our documents guide.
“Am I making decisions based on emotion or information?” — Carry can trigger strong emotions. Make sure your strategy is data-driven.

Start now

Get a baseline estimate with the CarryForward calculator before your first meeting with an attorney or forensic accountant. Walking in with a directional range shows that you’re informed and serious — and it helps your team focus on the right questions from day one.

Terminology 201: The Right Questions to Ask

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