Divorce can be a struggle, even when it’s amicable. If you suspect your spouse may be hiding income and assets, or your assets are so intertwined it seems impossible to separate them, a forensic accountant can help. Forensic accountants can find hidden income and assets, value the assets you do have and protect them.
When you’re worried that your ex-spouse is trying to hide something for financial or custody purposes, a forensic accountant can ensure everything stays above board. Here’s an overview of why you might hire one to assist with your divorce case.
What a forensic accountant does
A forensic accountant is trained to look through personal and business financial records to gain a full picture of the situation. For example, a person might be using business accounts to pay personal expenses, or vice versa. A forensic accountant will spot the inconsistencies and put together a report reflecting the true financial situation.
Specifically, a forensic accountant can help with the following:
- Valuing a business: If you and your spouse own a business together, it may be difficult to disentangle your assets. This is especially true when the business was started or supplemented with separate property, yet the business itself is a marital asset. A forensic accountant can assess the financial records and determine its true value, plus the sources of income or investment and to which partner they belong.
- Calculating alimony and child support: Forensic accountants can perform an income and cash flow analysis in order to calculate alimony or child support. While they don’t make either determination themselves, their services are used to show the true amount of money each spouse makes. Attorneys can use the findings to demonstrate how much each spouse earns, and argue for a spouse paying more or less in support costs.
- Identifying separate or community property: Finally, a forensic accountant will be able to trace the origins of each asset and show whether it’s separate or community property. Since California is a community property state, all income and assets acquired during the marriage should be divided equally, with a few important exceptions. Your forensic accountant can provide helpful information to prove to whom each asset and income belongs.
Do I need a forensic accountant?
If you’ve just filed for divorce, you may be wondering whether you need a forensic accountant in your specific case. Not every divorce requires one, especially if you don’t have children, share a business or have any additional major assets. In many cases, divorces can be settled by agreement.
However, if you suspect your spouse has been lying about money or expenses, a forensic accountant can uncover these secrets. They’re also useful when the two of you share complicated commingled funds, or there’s some question about asset ownership.
Ask your attorney about whether you need to hire a forensic accountant for your divorce case. If they suggest it would be helpful, call Medina & Company Consulting, Inc. today. We can help sort through your finances to ensure you receive a fair result.