While the decision to end the marriage might be straightforward, negotiating the division of the assets can be more complex. Asset division becomes even more complicated when one or both spouses have money or assets the other spouse does not know about.
During these complex situations, attorneys and traditional accountants often need to utilize outside help to uncover more information about the marital finances before moving forward with the divorce. If you have similar circumstances, it may be beneficial to include a forensic accountant as part of the team working on your divorce.
Here’s what you should know about how a forensic accountant could support your divorce case.
What is forensic accounting?
Forensic accounting adds an extra layer to the work of a typical accountant. While the person who helps you manage your business finances and files your taxes understands the complexity of your finances, a forensic accountant looks beyond the numbers to the bigger picture.
Forensic accountants will look at your spouse’s assets and analyze whether it seems that there is missing information. In some cases, missing information means a spouse is hiding money or other assets, so they are not part of the consideration for marital assets.
In addition to supporting divorce cases, attorneys will call on forensic accountants to assist with other types of cases, such as:
- Product liability
- Intellectual property infringements
When it comes time for the forensic accountant to communicate their analysis, they may create materials for court, documents for the attorneys or give a testimony in court.
What will the forensic accountant look at?
The job of the forensic accountant goes beyond simple bank statements. In addition to the traditional documents, the forensic accountant will look at other documents, such as:
- Tax documents
- Business transactions
- Credit accounts
- Property deeds and records
- Business records from the Secretary of State’s Office
After looking at the complete picture of your spouse’s financial situation, they can better determine if there are undisclosed assets.
When is forensic accounting important for a divorce?
Not every divorce requires the expertise of a forensic accountant. However, in situations where there is suspicion regarding marital property, accounts or other finances, a forensic accountant can help all parties get a more accurate overview of the case.
In Connecticut, most assets acquired during the marriage fit in the category of marital property, except gifts or inheritances. This means that even if your spouse purchases something without your knowledge, it is still typically considered marital property.
A forensic accountant can look at your spouse’s finances and analyze whether there are hidden assets or simply undisclosed assets. Once there is full disclosure of all the marital property, you can begin negotiating the equitable distribution of those assets.
Keep in mind, equitable distribution does not mean that each spouse will receive 50 percent of the assets. Instead, equitable distribution means that each spouse will receive a fair amount of the marital property. Also, if you or your spouse have gifts or inheritances that are not part of the marital property, those assets are not part of the consideration for equitable distribution.
What role does a forensic accountant play at trial?
Depending on the circumstances of your divorce, a forensic accountant could serve a few purposes, such as:
- An expert witness
- Providing visual aids to support evidence
- Creating reports for court and attorneys
While the testimony of an expert witness can be helpful, the other areas where a forensic accountant supports your case are critical as well. Their testimony may be compelling, but additional documentation of their analysis can help the court understand the evidence behind your attorney’s arguments.
Your spouse may make it challenging to prove that there are hidden assets as you are going through the divorce process. It is essential to have a team who can advocate for you and the equitable distribution of your marital assets. A specialist, like a forensic accountant, can support your attorney as they support what is fair for your divorce.