When divorcing couples are dividing significant and/or complex assets, honesty and transparency by both spouses is critical. Unfortunately, not everyone can count on their soon-to-be ex to disclose all of their income and assets.
This more often occurs in cases where one spouse outearns the other and has largely been responsible for handling the couple’s financial matters throughout the marriage. They could potentially have been moving money to offshore accounts, mingling it with their business’s assets, “lending” it to friends and family and spending it as they carry on extramarital affairs.
All of these things can be done with the intention of giving them fewer assets – on paper, at least – to divide with their spouse. This is where adding a forensic account to the divorce team can prove to be a worthwhile investment for the other spouse.
How can a forensic accountant help get a fair settlement?
Forensic accountants are trained to find “hidden” assets and income, study financial disclosures and other documents and otherwise make sure that a spouse is presenting a complete and honest picture of their assets and debts. This will allow the party for whom they’re working to seek an equitable property division settlement and the appropriate amount of spousal and child support.
Among the things a forensic accountant can do include:
- Finding hidden assets and income (as well as debt)
- Making sure that assets are valued accurately
- Tracing income, expenses, loans and transactions
- Reviewing tax returns
If a forensic accountant finds things that a spouse has not accurately disclosed — and they still won’t — they can prove to be a highly valuable witness for the other spouse, whom they can testify has been the victim of financial fraud. Of course, when confronted with this evidence, many spouses would prefer to simply give their soon-to-be ex what they deserve rather than risk bringing this out in the open.
Hiring a forensic accountant will, of course, increase a divorcing spouse’s expenses – at least up front. However, it can more than pay off if significant assets are being hidden or miscategorized. With experienced legal guidance, spouses can determine whether bringing in a forensic accountant is a smart move.