You may have heard the comparison before. Divorce is like the dissolution of a business partnership. Although there is conceivably more emotion involved at the end of a marriage, there are many financial considerations. Often, a forensic accountant is a valuable asset to the divorce attorney’s expert team.
Make no mistake. Forensic accountants aren’t just important to those involved in high-asset divorces. Equitable distribution is an important facet of every divorce. It is often advisable to retain a forensic accountant to review the couple’s assets and liabilities.
In case you’re not familiar with the term “forensic accountant,” we’ll give you some insight. Basically, this type of professional examines financials and analyzes them. It could mean investigating company books to determine business valuation. It’s prudent when couples have investments in the stock market. Forensic accountants are also useful in finding hidden assets.
How a Forensic Accountant Can Help Your Divorce Matter
New Jersey Business, a monthly magazine recently published an article regarding forensic accounting during divorce proceedings. They point out some of the obvious documents that are reviewed by forensic accountants in divorce matters:
- Personal and business records and tax returns
- Bank accounts
- Credit card statements
This information may be broken down even further. As part of the forensic accountant’s investigative role, he or she may wish to review actual canceled checks and request information regarding bank withdrawals. Unexplained deposits may also be questioned.
Why is this all important? Unfortunately, some divorcing spouses attempt to hide income and assets. This is particularly the case for those who operate cash businesses or have offshore accounts.
A forensic accountant is trained to recognize inconsistencies and bring them to the forefront. For example, one party may think that the marital residence is the only real property owned by either of the parties. A forensic accountant may find evidence within records of other assets. It might be as simple as finding additional property tax payments made by the family business.
Equitable distribution is not the only important consideration when it comes to retaining a forensic accountant. Since cash flow is often disputed in divorce matters, numbers can be better assigned.
Tax consequences are another issue in divorce cases. A forensic accountant can review these with your family law attorney. These are often an important consideration.
You can expect a forensic accountant to submit a report after reviewing all available documentation. It is always advisable for you to supply all information you have in your possession. If you have suspicions of hidden assets, you should also make your attorney and the accountant aware of them.
A forensic accountant’s findings are useful in negotiating a divorce settlement. The report may be submitted to the court if your case goes to trial. The forensic accountant may also be called as an expert witness.
We know it’s difficult to think of ending a marriage as closing a business. However, determining assets and liabilities is crucial to equitable distribution and support payments. At the Law Offices of Sam Stoia, we review every case to determine the need for a forensic accountant. Considering a divorce? Contact us to set up a meeting.