Nearly half of Americans married or living together claim they argue with their partner about money. After infidelity, financial trouble is the second most-common reason for divorce, and these disputes don’t end upon separation. The divorce process can lead to some of the most contentious disagreements between you and your ex—especially if you think they’re hiding income or assets to influence your share.
In such cases, add a forensic accountant to your divorce team. This expert specializes in searching for and finding secret accounts and properties. They can work with your lawyer, realtor, and other financial advisors to guarantee a fair settlement, and spousal and child support.
Here’s what you need to know:
What Is a Forensic Accountant?
According to the Forensic CPA Society, forensic accounting “is the specialty practice area of accounting that describes engagements that result from actual or anticipated disputes or litigation.” Forensic accountants provide litigation support and financial investigation services, examining data to uncover hidden sources of income or missing money. They typically analyze tax returns, account and credit card statements, investments and stocks, property deeds and other documentation. Then, they develop expert reports explaining their findings. A forensic accountant may appear in court to testify according to their discoveries.
Who Should Use One?
Although a forensic accountant is typically used to find hidden assets, this isn’t the only reason to hire one, explains Shapiro Family Law, a Denver, Colo.-based practice specializing in divorce, child custody and support, property division, and more. If your divorce involves many or high assets, your case is financially complex, or there are conflicts over property division, it’s a good idea to enlist a forensic accountant to review you and your ex’s financials. Other instances this addition to your divorce team would be helpful include: if either spouse is a contractor or 1099 worker, if either or both spouses own a business, or if either had considerable pre-marital assets and liabilities.
What Are the Benefits?
A forensic accountant provides several advantages, including:
Search for Hidden Assets or Income
A forensic accountant has the tools and skills to find hidden and off-shore accounts, and other assets, such as property or cryptocurrency. They also search for inconsistencies among financial documents.
Uncover Additional Faulty Financials
According to Forbes, a forensic accountant may also discover unethical practices such as padding payroll, underreporting income, overpaying creditors, creating fake debt, transferring assets to dummy corporations, and purchasing items with secret cash.
Perform a Business Valuation
For couples who own joint businesses, a forensic accountant can determine their estimated values. The accountant will also calculate personal expenses labeled as business expenses, which may impact the company’s overall value.
Appraise Assets & Properties
In addition to joint businesses, forensic accountants have the ability to appraise additional assets such as property, vehicles, and valuables (art collections or antiques). They will perform tracing to determine separate and community properties.
Authenticate Financial Information
Once they’ve completed their review, a forensic accountant will document their findings in a report supplied to your attorney. They will testify in court or at depositions, as well.
Assist Your Attorney
Forensic accountants can prepare document requests for the other party and gather information necessary for subpoenas. Your lawyer may also need assistance preparing interrogatories, depositions, or trial questions to ask the opposing party’s forensic accountant. These specialists also have contacts with computer forensics specialists or private investigators, if necessary.
Find a forensic accountant using DivorceForcePRO. Directly connect with experts in your area.
Gregory C. Frank is the CEO and Founder of DivorceForce.