There are so many issues at play in a divorce. Things can turn to a mess at many different levels. One such level involves finances. The financial aspects of divorce can be emotionally charged and messy. This can lead people to do all sorts of things by justifying that they are protecting what’s theirs and intentionally denying someone else his or her fair share. Because people can go to such lengths as hiding assets, funneling income through business to make it look like he or she does not make much money, or finding other ways to devalue property and other assets, forensic accountants are often brought in to help clarify financial matters in divorce so that everyone involved is given a clear picture of a couple’s financial landscape.
What Does a Forensic Accountant Do During Divorce Proceedings?
Unraveling the intertwined financial life of a married couple can be difficult enough when all parties are knowledgeable about the financial matters that impact them and everyone is being honest and cooperative. Throw in a less than candid spouse and you can have some real problems in terms of sorting through finances in a divorce This is where a forensic accountant comes in. A forensic accountant sifts through a couple’s financial information to get an accurate picture of all assets and liabilities involved. This helps to ensure that there is a proper distribution of assets and liabilities in the divorce.
A forensic accountant will sift through extensive financial records, including:
- Tax returns
- Credit card statements
- Bank accounts and other financial statements
- Stock certificates
- Investment account statements
- Property deeds
In essence, a forensic accountant will review any records or documents relevant to a couple’s financial status. This can extend, in turn, to any business holdings of either spouse. In fact, forensic accountants are often brought in to evaluate the value of a business.
A forensic accountant will help establish the income of each party as well as the total value of jointly held and marital property as well as separate property. Furthermore, a forensic accountant can check to see if both spouses are accurately reporting their income. Part of the review process will involve the forensic accountant running an audit on business records to check for things like whether a spouse is running personal expenses through the business to try and make it look like the business is not making that much money.
When going through all of this financial information, a forensic accountant will look for any inconsistencies, irregularities, and red flags. The financial impacts divorce can have on the parties involved is significant and it can be critically important that each spouse’s financial situation is accurately revealed so that things like division of the marital debt and property, child support, and spousal support are accurately calculated.
Criminal Defense Attorneys
A forensic accountant can be an invaluable part of the divorce process. For more information on uncovering hidden assets and ways to get an accurate picture of your finances with a divorce pending, talk to the team at Navarrete & Schwartz about your options. We are proud to serve the residents of Midland, Texas. Contact us today.