Increasingly, attorneys, judges and clerks are turning to qualified forensic accountants in divorce cases to perform comprehensive investigations into the personal assets of individuals so that all is known during family law matters – whether it’s in court, during mediation or in settlement proceedings.
A certified forensic accountant (also known as Certified in Financial Forensics “CFF” or Certified Fraud Examiner “CFE”) engages in in-depth financial analysis that includes reviewing financial data for accuracy, establishing a standard of living and income for each spouse, finding and identifying hidden assets and determining what is and is not marital property (and thus subject to the property division process).
The services provided by a forensic accountant may vary depending on the case, but they commonly include creating or reviewing marital statements of net worth that outline all of the marital and non-marital assets between the divorcing spouses. This can become complex when the real value of assets is not immediately clear, especially when it is related to privately owned businesses, investments, insurance policies, pensions and 401(k)s.
The accountant must also determine the income of each spouse, including now and in the past, and the potential for each to earn income in the future. Another important task involved in this discovery process is to analyze each individual’s lifestyle and expenses to ensure that each has disclosed accurate information preceding a divorce.
Most commonly, a forensic accountant is needed when one spouse had control over the couple’s finances, and the other suspects wrongdoing. The person maintaining the financials usually has an incentive to hide money to reduce expensive divorce settlements and costly spousal maintenance and child support payments.