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Do I need a forensic accountant?

| Dec 28, 2020 | High Asset Divorce |

An equitable divorce depends upon accurate accounting. Child support and spousal support calculations are income-based. The division of marital property requires an inventory and valuation of the parties’ assets and debts.

A forensic accountant specializes in disputed calculations or information. There are several common divorce situations when a forensic accountant may be necessary.

Determining income

A person’s actual income is not always clear, especially if that person is self-employed. Sometimes this is intentional, such as keeping personal funds in a business account or claiming personal living expenses as business costs. This may also be unintentional, such as when income is seasonal or varies widely from one pay period to the next. Ordinary income calculation methods may result in an excessively high or low income estimate. A forensic accountant is able to create a more accurate representation of a person’s true income.

Valuing business interests

When one or both parties to a divorce owns a business or is an equity partner in a company, the business interest may be a marital asset. A forensic accountant is helpful in determining the monetary value of the business and of the spouse’s interest in that business.

Tracking separate funds

In some situations, one spouse may have had significant assets or debts before the marriage or may have bought an asset with separate money. Forensic accountants trace these funds to their separate origins.

Divorce proceedings are often expensive. Skipping the forensic accountant may seem like a tempting way to cut costs. However, by providing neutral, definitive numbers, forensic accountants usually save parties the time and money they would have spent arguing over unknown amounts.