Divorce Attorney Scott J. Stadler

    • 04 DEC 20
    Do I Need a Forensic Accountant for My Divorce?

    Do I Need a Forensic Accountant for My Divorce?

    You are already dreading the cost of hiring a lawyer for your divorce. Now you are convinced that you need to hire a forensic accountant, as well. Maybe you think your spouse spent a lot of marital money on an affair. Maybe your husband gambled it away. Perhaps there is an unexplained amount of money missing from your wife‘s business.

    What Does a Forensic Accountant Do?

    A forensic accountant gives expert testimony regarding finances at a court trial. They use accounting, auditing, and investigative skills to trace the origins of money-related matters and figure out where the money went. They often deal with civil disputes such as business valuation, calculating and quantifying economic damages and disagreements relating to company matters. They may deal with crimes, such as money laundering, or fraud, which can be found in a divorce case.

    Forensic accounting primarily involves investigation and litigation support. Accountants may investigate fraud and theft cases. Forensic accountants use their accounting knowledge to resolve legal issues. They are often asked to conduct fraud investigations, write reports, testify as an expert witness, and assist in various investigations.

    In regards to litigation support, a forensic accountant may be able to resolve disputes before going to court. If a trial is necessary, they will quantify the damages sustained by the victims of legal disputes. Forensic accountants have a solid knowledge of the courtroom, which sets them apart from the average accountant.

    Reasons to Hire a Forensic Accountant

    Splitting assets in a divorce is not as easy as it seems. Some couples have complex finances. Besides bank accounts, they may have investments such as stocks and bonds. They may have multiple homes and several vehicles. They may have retirement accounts and own various businesses. There may also be a lot of debt involved.

    In these cases, asset division can be very complicated. In a divorce, there needs to be information about the value of the marital assets. How was the money spent during the marriage? Who contributed what?

    Not every divorce case requires a financial expert, though. There are several situations in which hiring a forensic accountant can be helpful:

    • Lifestyle and spending habits. The amount of alimony you can expect to receive after a divorce is based on your lifestyle during your marriage as well as how you and your spouse spent your money. It is also based on income, so all these factors will be assessed by a forensic accountant to ensure you receive a fair amount of money.
    • Dissipation claim. This refers to unauthorized use of marital money, which typically encompasses gambling and extramarital affairs. If a spouse makes this type of claim against the other spouse, then a forensic accountant will need to come in and analyze the truth of the claim. They will need to go through bank statements and credit card bills to determine how much was spent on non-marital expenditures. The accountant will also figure out how much the other spouse should be compensated for their spouse’s unauthorized use of the money.
    • Income. Pay stubs and tax returns do not tell the full story of how much money a person truly earned. This is especially true if a business was involved. There is often a lot of money flowing out of a company and sometimes business owners use revenues to pay for personal expenses. This commingling of funds can skew the numbers, so a forensic accountant is often needed to analyze the situation and determine the true cash flow. This is then used to determine child support, if applicable, and assess whether either party needs alimony.
    • Business value. Speaking of businesses, a forensic accountant can help determine the value of a business, which is different from the revenue and income it produced. When one spouse owns a business, the other spouse is entitled to a portion of that business in a divorce. In many cases, the business is the largest asset in the marriage, so it is important that the accountant thoroughly analyze the various elements of the company to arrive at an accurate value. This means looking through the books and analyzing intangible assets as well. Once the value is determined, the parties must then find a way to divide the business equally.
    • Analysis of corporate benefits. If there is a business involved in the divorce, it is possible that there are company benefits involved. These may include stock options, performance shares, retirement plans and other long-term benefits that gain value over time. It is the job of the forensic accountant to take all this into consideration and create models and projections that show the estimated value of these benefits in the future.
    • Tax analysis. All divorces incur some sort of tax situation, since there is a division of assets. A forensic accountant is knowledgeable of all the laws and can help you arrive at a settlement that results in the least amount of taxes.

    Seek Legal Help

    A successful divorce outcome depends on the best team possible. A divorce involves many aspects and while you may have a lawyer, hiring a forensic accountant may also be a good idea, especially if you have concerns about hidden assets.

    Broward County divorce attorney Scott J. Stadler can give you solid advice to help you deal with all the elements of a divorce. He can help you find the right experts to assist with divorce matters such as finances. Fill out the online form or call our office at (954) 346-6464 to schedule a consultation.