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One type of expert that is commonly used in divorce matters are Forensic Accountants. Within the context of divorce litigation or other family law or domestic relations disputes, forensic accounts are accounts who analyze bank accounts, financial records and spending habits of one or both parties to a divorce to determine income, earning ability and assets for the purposes of equitable division of marital property, child support and alimony.
For example, if the husband in a divorce action believed that his wife had begun hiding money in a secret bank account in anticipation of the divorce, a forensic accountant may be engaged to uncover the secret bank account and trace any marital income or assets taken by the wife and placed in this secret account. As mentioned above, forensic accountants may also be engaged to analyze the lifestyle or spending habits of one spouse to determine if he or she is purposefully underreporting income in order to avoid paying the appropriate amount in child support or alimony. In this case, a forensic accountant may reconcile the bank and accounting records of the suspect spouse with that spouse’s spending habits to uncover any discrepancies that show that the spouse has access to funds or assets that he or she has refused to disclose. In addition to what has been outlined above, below is a concise list of the ways in which a forensic accountant may be useful in your divorce matter:
- Investigate and uncover hidden assets and/or hidden income.
- Investigate and reveal inconsistencies in the financial information provided by the other spouse.
- Verify financial information provided by one or both spouses.
- Determine and differentiate between personal and business expenses.
- Calculate a spouse’s accurate income for the purposes of calculating child support payments or determining appropriate alimony.
- Trace funds to determine the separate or marital nature of certain funds or accounts.
- Assist the divorce attorney in preparing document requests or interrogatories to the other party, specifically regarding financial matters.
- Review certain work performed or reports prepared by the forensic accountant working with the other party.
- Testify in court or at depositions regarding the findings made.
- Provide input during the settlement process on the financial consequences of certain proposed settlement offers.
Although there are several benefits to engaging the services of a forensic accountant, it is prudent to perform a cost-benefit analysis to ensure that the projected cost of the desired services will not exceed the expected benefit. Like attorneys, forensic accountants are highly trained professionals who often charge hourly rates for their services and for the time they spend testifying at trial or depositions.