How Can a Forensic Accountant Assist with a High Net Worth Divorce?

 Posted on January 14, 2021 in High Asset Divorce

The process of getting a divorce is rarely easy or simple. While all divorces have their own unique complexities, high net worth divorce cases can be especially complicated, since couples will need to address a wide variety of financial issues, including considering multiple sources of income, investments and other complex assets, business ownership, taxes, and debts. Whether a couple is involved in complex property litigation or needs assistance unraveling the details of their finances, a forensic accountant can be an invaluable resource.

Forensic Accounting During the Divorce Process

Forensic accountants can review financial records, perform appraisals, and analyze assets, debts, income, and other issues that affect a couple’s divorce. By providing a full understanding of a couple’s financial situation, these experts can help ensure that marital assets and debts are divided fairly in a divorce settlement, that financial support is calculated correctly, and that any concerns about undisclosed assets or misreported income are addressed properly.

Some of the issues that a forensic accountant may be able to address during the divorce process include:

• Business valuation - If spouses own business interests either together or separately, a forensic accountant can review business records, analyze cash flow, and appraise business assets to determine the value of the business. This can ensure that a business will be properly considered when dividing marital property.
• Uncovering hidden assets - By reviewing financial statements, tax returns, and other records, a forensic accountant can identify any inconsistencies and determine whether a spouse is attempting to conceal property or income to avoid dividing certain assets during the divorce process. Potential methods of hiding assets could include secret bank accounts, cryptocurrency, transfers of funds to friends or relatives, or making payments to a nonexistent employee through a business.
• Income determination - Child support or spousal support payments will usually be determined based on a spouse’s income. Spouses with a high net worth may have multiple sources of income, including bonuses, executive benefits packages, and profits earned by business interests or investments. A forensic accountant can help spouses gain a full understanding of the income a spouse currently earns and what they are projected to make over the next several years, ensuring that support payments will be based on the correct figures.
• Asset tracing - Couples who own complex assets may have difficulty distinguishing between marital property and separate property, especially when these assets have been commingled. A forensic accountant can review financial records and trace different assets back to their source, allowing assets and debts to be categorized correctly and ensuring that property is divided fairly.
• Tax consequences - A forensic accountant can determine how federal, state, and local taxes will apply to the transfer or sale of assets during divorce, and they can ensure that a settlement is structured in a way that will help spouses minimize their tax burdens and avoid unexpected tax bills.

Contact an Austin, TX High Asset Divorce Attorney

At Powers Kerr & Rashidi, PLLC, we regularly work with forensic accountants to ensure that our clients have properly addressed the financial issues involved in complex divorce cases. During your divorce, we will advise you on the best steps you can take to protect yourself financially, and we will advocate on your behalf and help you reach an outcome that will allow for your ongoing success. Contact our Austin high net worth divorce lawyers at 512-610-6199.

Sources:

https://www.forbes.com/sites/jefflanders/2014/09/04/why-a-forensic-accountant-belongs-on-your-divorce-team/?sh=2146ece6718a

https://www.eisneramper.com/forensic-accountant-divorce-1015/