Forensic Accounting and High Asset Divorces

What is a Forensic Accountant?

Forensic accountants are financial experts who conduct accounting, investigations, and audits to thoroughly assess an individual or entity's finances. More specifically, they are Certified Public Accountants (CPAs) who may work with attorneys, law enforcement agencies, insurance companies, and banks or other financial institutions to look for relevant legal evidence. In the case of a high-asset divorce in Owings Mills, forensic accountants are used to identify all marital assets.

What Is the Role of Forensic Accounting in High-Asset Divorce Cases?

Forensic accountants are integral to the divorce process in many cases, ensuring that no assets remain hidden or overlooked at any point during proceedings. The following are some of the main functions of forensic accounting in high-asset divorce cases in Owings Mills:

Identifying Hidden Income and Wealth

Forensic accountants may use multiple methods to identify any hidden wealth or income that a party might conceal during divorce. For example, a former spouse may attempt to hide assets in offshore accounts abroad or attempt to delay payouts until divorce proceedings end. Individuals may also try to avoid reporting personal belongings such as art collections.

Business and Financial Interest Valuation

Many divorce cases also involve business interests, with assets pertaining to businesses, professional practices, or partnerships. With the help of forensic accounting, it is possible to evaluate these practices to determine a spouse's business ownership and compensate the other spouse accordingly after divorce. This process is often complicated and involves multiple steps, including:

• Examining financial statements, such as balance sheets and statements

• Projecting the business interest's potential future income

• Comparing the business interest against the current market value

• Valuing goodwill, separating personal from enterprise goodwill

In addition to these tasks, a forensic accountant may be able to advise high-asset individuals of financial liabilities, calculate spousal support and child support payments, and serve as an expert witness in divorce court or a deposition. 

How Can an Attorney Help With Forensic Accounting in High-Asset Divorce Cases?

Working with a forensic accountant could ensure that a lawyer’s client understands all of the documentation and processes that apply to their financials. When collaborating with a forensic accountant, an Owings Mills attorney could help identify any hidden assets, analyze financial data, and advocate on the client's behalf to facilitate the fair division of all assets and debts.