The work of a forensic accountant is essential when valuing and dividing property in a complex divorce. They closely analyze documents to assist the California family law court in making decisions on child support, spousal support (alimony) payments, and dividing community property, also called “marital property.”
Forensic accounting professionals often work closely with family law attorneys who retain them for their accounting practices in a legal case.
To ensure fair property valuation and division in a divorce, some everyday items they will examine include bank statements, retirement accounts, investment accounts, tax returns, contracts, and other relevant financial documents.
Forensic accountants dig deep to seek any hidden assets and inconsistencies within financial records. Their primary role will depend on what is needed, guided by a divorce lawyer.
They will closely examine financial documents, including assets and income verification, to determine their accuracy within specific financial claims.
Notably, it's pretty routine for a spouse to deny or falsely report certain assets, such as money spent on an extra-marital affair, gambling, off-shore accounts, or other types of other hidden property.
In California divorces, the term “discovery” means the process of information gathering. Here, the services of a forensic accountant can be crucial in assisting a divorce lawyer.
In other words, the accountant will work closely with your attorney to ensure all the proper documents and information is gathered through motions and subpoenas.
Further, they can provide information that could help your divorce attorney prepare the interrogatories for your spouse. These are written questions that reveal information and aid a lawyer in preparing for deposition and trial. Our California divorce and family law lawyers will review this topic further below.
What About Joint Assets and Liabilities?
A forensic accountant can help identify joint assets and liabilities. In many marriages, one spouse will handle the financial matters.
In case of a dissolution of marriage, this is a severe disadvantage for the other spouse. So, when a divorce is pending, the spouse handling all the financials might try to hide assets for a favorable settlement.
A forensic accountant can identify and report all joint assets and liabilities. Their report can help ensure an equitable division of assets.
When valuing assets, a forensic accountant has the skills and knowledge to complete the following:
- Determine community and separate property;
- Determine monthly cash flow and expenses;
- Determine valid business expenses for accurate valuation;
- Calculate the actual value of each asset;
- Verify financial data during an appraisal;
- Separate personal expenses;
- Value businesses and professional practices for doctors, lawyers, and other professionals.
Suppose your divorce case proceeds to a trial. In that case, a forensic accountant can provide crucial testimony in court. In other situations, they could give you essential input about the tax implications of dividing marital property.
Why Would You Need a Forensic Accountant?
Forensic accounting in a divorce typically involves investigating and auditing issues related to finances. When needed, a family law lawyer often hires them to examine fiscal matters closely, but you can retain one independently.
Their testimony can be compelling evidence to support your claims over child support, spousal support, the division of property, or any other divorce-related issue.
So, during the California divorce process, you can hire the services of a forensic accountant for any of the following reasons:
- Determine both spouse's income and other sources of money to calculate child support and alimony payments, including reviewing W-2s, payrolls, and expenses paid to and from business or personal accounts;
- Uncover hidden assets from the higher-earning spouse to help accurately calculate any support obligations. Suppose you suspect your spouse is hiding or falsifying records. In that case, a forensic accountant can help you;
- Create a list of marital assets and liabilities to help in the property division process of the divorce, including values of specific properties;
- Determine whether your business and personal accounts were intermingled, which can complicate income issues;
- Conducting a business valuation for property division if either spouse owns a business, professional practice, or other valuable assets;
- Conduct a standard of living examination to help calculate alimony and other support obligations based on income and spending habits;
- Investigation any wasteful dissipation claims, which is when a spouse intentionally spends marital assets during the divorce process;
- Provide valuable advice on future financial matters after your divorce, such as the tax consequences and other relevant issues;
- Assist your family law lawyer in closely reviewing financial documents submitted to the court by your spouse to check for accuracy.
Consult With a Family Law Attorney For Help
A forensic accountant can help uncover crucial financial information that could ultimately affect how your assets are divided.
They can ensure that everything listed under the marital property is valued correctly and that all the liabilities are included. In addition, they can work closely with your attorney to create a strategy to divide assets and liabilities between spouses equally.
A forensic accountant's help can help ease the divorce process when there are complex financials to consider. In addition, retaining an experienced California family law attorney can be crucial to the outcome of your divorce case.
At Furman & Zavatsky, our Certified Family Law Specialist has years of experience helping people who are getting a divorce connected with an expert who can impact the outcome of your case, such as a forensic accountant.
You can contact us for a free case consultation by phone or use the contact form. We are located in Los Angeles County, California.
