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If you're involved in high asset divorce, you may have a hard time understanding exactly what's at stake, financially speaking. That's why you may need to hire someone qualified in this exact area. Even if you already have an experienced divorce attorney, you may consider hiring a forensic accountant to make sure your assets are accounted for and protected.
Forensic accountants who are experienced in divorce proceedings are typically hired either directly by a party to the divorce, or by an attorney representing one spouse. An accountant provides a financial analysis to assist with the divorce process, particularly in marriages where one or both spouses hold significant assets. They are typically a Certified Public Accountant, with specialized skill sets unique to the profession, including conducting investigations that extend beyond the typical alimony and child support calculations that are conducted by a divorce attorney.
What Is Forensic Accounting?
Once all the required court disclosures are made by the parties to a divorce (including monthly expenses for housing, expenses, food, clothing, utilities, insurance, medical bills, taxes, household maintenance, education, transportation, and recreational activities, income, assets, liabilities, debts, etc.), the accountant will commonly investigate financial records and conduct an audit if necessary. They may investigate both spouses' assets, review bank account and credit card statements, and investigate whether there are recent significant write-offs.
They also will search public records such as property deeds. Often to avoid disclosure a spouse may transfer property to a family member or friend and, after the divorce, reclaim the property. A spouse may also have court judgments against outside parties, which will eventually provide them with more income they did not disclose.
When one spouse owns a business, a search will be conducted of the Secretary of State's Office, which typically retains financial statements for five years.
When Should I Consider Hiring an Accountant?
Forensic accountants are especially useful when one spouse suspects another spouse of hiding assets to gain an unfair advantage during divorce proceedings. The best attorneys for this type of situation are ones that use an accountant to ensure all assets of both parties are disclosed in full and confirm that no assets are hidden.
Consider hiring a forensic accountant when you suspect that your spouse is hiding income or assets to gain an unfair advantage in a divorce proceeding. Also, a couple will often divide their roles in a marriage. For example, one spouse may take on the money management role, while the other assumes other roles, such as caring for the couple's children, or one spouse may run their own business while the other is employed by a company.
In these situations, it is wise to spend the extra money on an accountant to help a disadvantaged spouse get their fair share of assets when the divorce is finalized. Keep in mind that any asset that is not disclosed, and fails to be discovered, could be spent or sold by the spouse in possession.
If you're unsure if you need a forensic accountant for your divorce, contact your divorce attorney for guidance.