When would you need a forensic accountant in a divorce?


Generally speaking, a forensic accountant offers much more intense accounting and auditing than a traditional accountant, and is similar to a financial investigator.  

It’s often used in a divorce when the finances are complicated or one party feels another is trying to hide or undervalue assets or simply in a high-net-worth divorce. After all, there may be assets and liabilities that have been transferred and unknown within the marriage. So forensic accountants must dig deep into all of the financial concerns. 

For instance: they may investigate bank accounts, retirement accounts, pensions, 401ks, claims by insurance, records of home purchases, including any loan applications, tax filings, personal and business loans, credit reports, businesses records and related financial documents even if created in different states or countries that the spouse wasn’t aware of. 

Assets (and even debt) may be hidden altogether or simply undervalued. They may uncover money laundering, fraud, and more. Those assets are critical in helping to determine the proper equitable division of assets, child support, alimony, etc. 

Unfortunately, people can and do reveal false statements knowingly or unknowingly at times. However, a deliberate lie is considered perjury, which is illegal and can result in harsh consequences such as fines and worse. 

If foul play is suspected, your divorce attorney or judge may recommend you get a forensic accountant in such circumstances to ensure both parties are fairly compensated. This often will take place within the discovery process of a divorce, where parties are required to list their assets and liabilities. The forensic accountant may even be required to testify in court on behalf of one party, or as an independent neutral.  

Of course, there’s a cost associated with hiring such a highly trained professional. And this can range in the tens of thousands of dollars in all and hundreds of dollars per hour alone. Both parties or just one spouse may have to cover the cost of the forensic accountant. But their value may significantly outweigh the cost, based on the results of what’s found. 

To determine equitable distribution in a divorce, full financial transparency is required–which may require, in some circumstances, the use of a forensic accountant to analyze and verify the accuracy of the information. 

If you are going through a divorce and there are extensive assets at stake, contact the Sabra Law Group in Manhattan at (646) 472-7971 to determine whether a forensic accountant is appropriate in your situation. The firm’s expertise is in all forms of family law, such as alimony, divorce, prenuptial agreements, post-nuptial agreements, child custody battles, child support, domestic violence, and restraining orders. 

 


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