Benefits of Using a Forensic Accountant in a Divorce
When a couple begins the divorce process, transparency about assets is critical. This information provides the foundation for nearly every aspect of a divorce agreement, but nowhere more than property division.
There can be no fair determination of which spouse receives what if there is no true accounting of the marital property. From finding hidden bank accounts to revealing the dissipation of assets, a forensic accountant’s work can result in a fairer divorce settlement
Role of a Forensic Accountant
A forensic accountant helps in the following ways:
- Analyze financial records for inconsistencies
- Pinpoint evidence of hidden assets
- Appraise assets and properties
- Search for hidden trusts and accounts
- Uncover dissipation of marital assets
- Determine if a spouse is under-reporting their income
They reach their conclusions by scrutinizing tax results, property deeds, bank statements, retirement account statements, paycheck stubs, investment accounts statements, and other records. Self-employed spouses will have their business evaluated because a company is an easier place to obscure their salary and conceal assets.
Results of Forensic Accounting Directly Impacts Divorce Decree
Financial transparency is a legal requirement in Washington State divorces. Fair divorce agreements are only possible when each spouse understands the resources and liabilities of the other. Property and debts are divided according to their value and the resources of each spouse. A truthful depiction of income and expenses is also used to determine child support and spousal maintenance obligations. A forensic accountant brings issues to light, blocking attempts by one spouse to purposely disadvantage the other party in the divorce. For litigated divorces, a forensic accountant can provide expert testimony in the courtroom.
How Spouses Try to Tip the Scales
Divorce does not always bring out the best in people. Fueled by anger, the need for revenge, or another negative impulse, spouses sometimes take steps to hurt their estranged partner financially. Methods used to hide assets from a spouse run the spectrum from overpaying taxes for a refund later to moving assets into secret out-of-the-country trusts.
Other ways an individual conceals their true worth include the following:
- Funneling cash into safe deposit boxes
- Anonymously buying NFTs or cryptocurrency
- Overstating debts to lower their net worth
- Giving valuables or cash to friends or relatives to be returned to them later
- Under-reporting the value of collections and heirlooms
- Purposely delaying a bonus or promotion until after the divorce
Experienced divorce lawyers know how to watch for warning signs that indicate potential wrongdoing.
Hiding Assets Can Backfire
When financial misconduct is discovered in the divorce process, the consequences are more significant than leaving the offending spouse red-faced. Such conduct is against the law. The court does not look kindly on actions meant to undermine the other spouse. The judge has the authority to award a greater share of the marital property to the victimized spouse. The entire amount the spouse was trying to hide can be given to their ex. The court also can choose to award the spouse alimony. In particularly egregious cases, the court may find the lying spouse guilty of perjury. Consequences of perjury can be fines and even jail time.
Providing an Array of Skilled Resources for Equitable Divorces
The first step in the divorce process is to hire an accomplished and knowledgeable attorney. When you work with McKinley Irvin, you get more than top-notch legal representation. You have access to a full complement of professionals that collaborate with our attorneys. Business valuators, real estate appraisers, and forensic accountants are among the experts at our disposal based on the needs of our clients.
Who you choose to guide you through a divorce is a consequential decision. Schedule a consultation with McKinley Irvin by calling 206-397-0399.