Some divorces are simple. Marital assets up for dividing include the house, cars and bank accounts. But for many couples, a few pieces of furniture and some credit card bills do not cap off their list of belongings.
Divorce gets complex when spouses bring stocks, businesses and insurance plans to the table. These types of assets take more time and expertise to evaluate and divide. For example, a couple may own a vacation home in a different state or country. That vacation home may have been decorated with valuable artwork by the other spouse. Since artwork will need appraisals and different state laws come into the mix, the process grows more complicated.
At this point, a forensic accountant is a much-needed addition to the divorce team.
Why is a forensic accountant important?
A forensic accountant examines you and your spouse’s personal and business financial records. These experts can uncover unethical practices, such as fake debt, purchasing items with secreted cash and underreporting income. For spouses who own businesses or are involved in partnership agreements, a forensic accountant can closely evaluate these unique assets.
When should you hire a forensic accountant?
Even if you have no suspicion of wrong-doing, a forensic accountant can help protect your settlement and prevent improper valuation. It is wise to utilize an accountant for many reasons, such as:
- Money management. One spouse might have managed all the money and financial affairs during the marriage. It is a common case when both spouses do not share equal knowledge of the finances.
- Hidden or transferred assets. There is always the possibility that income or assets are concealed in the event of a divorce. A forensic accountant examines financial records and can uncover any assets that would affect equitable distribution.
- Closely held businesses. If you and/or your spouse own a business, both of you most likely relied on the income from that marital property. During a divorce, it is important that the business is examined in case your spouse used the business to hide income or value.