Most people hope their divorce will be relatively simple and that they won’t have to worry about their soon-to-be ex not acting in good faith. Unfortunately, that’s not always the case – particularly with a couple that has substantial and/or complex assets.
If one spouse is the primary earner, has a business or has always been the one in charge of the couple’s finances and taxes (or all of these things), the other spouse needs to be especially vigilant about ensuring that they get a fair divorce settlement.
Both divorcing spouses are required to give full and accurate financial disclosures at the beginning of the process. Unfortunately, it can be all too easy for one spouse to hide assets if the other one doesn’t know just what they have.
There are a lot of ways for a person to hide or redirect money so it’s not included in their accounts or other stated assets. This can involve anything from mixing it with business assets, putting it in offshore accounts and undervaluing assets to relatively simple things like giving it to a family member or friend to hold until after the divorce.
What do forensic accountants do?
If these “hidden” assets are significant, it can be worth the investment to add a forensic accountant to the divorce team. What does a forensic accountant do?
These professionals know how to spot something amiss in financial disclosures, account statements, tax returns and other documents and know where to look for assets and income that have been “redirected” out of the places where the other spouse wouldn’t think to look for them – or even know they existed.
Forensic accountants can also find hidden debt so the spouse who didn’t rack up that debt doesn’t get stuck paying it off. Further, these accountants can make sure that assets are valued accurately. They can also act as an expert witness if a property division or other matter related to money has to go before a judge to explain why a spouse’s financial disclosures aren’t accurate or complete.
Locating hidden assets as well as other types of fraud that a spouse has engaged in to appear to have less to divide than they actually do can affect not just the property division settlement but spousal and child support orders as well. Deciding whether to bring a forensic accountant on to the team is best to discuss with your family law professional as early as possible.