The Role of a Forensic Accountant in a High Asset Divorce

The Role of a Forensic Accountant in a High Asset Divorce

High-asset divorces are considerably more complicated than standard divorces. The more money and assets a couple brings to the table, the more work it generally is to sort them out fairly. It’s particularly complicated when there are numerous income streams that are difficult to track, hidden assets, and assets that fluctuate significantly in value.

That’s why it’s important to have an attorney with experience in high-asset divorces. We understand the importance of carefully tracking assets and income, and we know the benefits of working with a forensic accountant. Call Pence Law Firm at 304-345-7250 to set up a consultation with our team of Charleston divorce lawyers.

What Do Forensic Accountants Do?

Forensic accountants are financial professionals who have extensive training in investigative techniques and their use in evaluating financial records and evidence. Forensic accountants apply their expertise to account records, transaction logs, tax documents, and other financial documentation. Their experience puts them in a position to identify irregularities and discrepancies, as well as provide expert opinions about the sources of funds and assets.

In divorce cases, forensic accountants are often brought in to identify and value income streams, as well as to identify and track down hidden assets. They are particularly helpful in divorces where one spouse has full control of financial accounts, and the other spouse is entirely in the dark about their financial well-being.

Asset Tracing and Valuation

One of the responsibilities of a forensic accountant is identifying and valuing marital assets to ensure the equitable distribution of those assets. Their financial analysis skills allow them to prove accurate valuations and track down assets that may have gotten lost over time—for example, retirement accounts or old bank accounts that have sat unused for years. Asset tracing is especially important when one spouse is attempting to avoid the fair distribution of marital assets. They may give away or sell assets for below market value with the plan of getting them back after the divorce.

Income Stream Analysis

High-asset divorces often have numerous income streams, which can make it difficult to get an accurate financial picture of the couple’s annual income and overall financial value. Forensic accountants can analyze annual incomes, bonuses, rental income, executive stock options, business profits, and dividends. They do this by digging through financial statements, bank records, tax returns, and other financial documentation to identify every way a couple earns money. 

This is incredibly important when it comes to calculating spousal support and child support. It’s also important when it comes to dividing assets, as those same assets may be tied to income streams. For example, a rental property or family business may make up a sizable chunk of the family’s income. Fairly dividing those assets is easier when you know the true value of the income streams.

Cash Flow Investigation

This skill is crucial when one spouse is entirely dependent on the other for financial support and information. When only one spouse has access to the couple’s finances, it is very easy for them to manipulate and misdirect their partner. In turn, this makes it incredibly difficult for the partner who isn’t involved in the finances to get far less than they deserve during the divorce. 

A forensic accountant may look for irregularities or discrepancies that don’t match up with a couple’s financial documents. In doing so, they may find ways that the spouse who handles the finances has accrued substantial debt, committed tax fraud, supported their affair partner with marital finances, or attempted to hide income streams and assets from their partner. In uncovering these acts of deceit, the forensic accountant gives the other partner the information they need to fight for what they deserve during divorce. A fair divorce settlement is only possible when both parties have full access to accurate, transparent financial information.

Prepare for Your Divorce with the Help of Pence Law Firm

As you begin to plan for life after divorce, make sure you have the support of the team at Pence Law Firm. Call us at 304-345-7250 or get in touch online to schedule a consultation with our team of Charleston high-asset divorce attorneys.