Last week we discussed the benefits of having a forensic accountant on your side when you are going through a high-asset divorce. This week we would like to continue that discussion by looking at what specifically a forensic accountant may look for.
After years of marriage, some spouses may assume that they have built some sense of trust with their soon-to-be-ex. For that reason, they may be more apt to believe that their spouse is being forthcoming during the divorce process. But as many people who have been through divorce can tell you, divorce can bring out the worst in people. Not only that, but deceit may actually go back much further than one anticipated. For example, a forensic accountant will analyze records and look for specific trends. In doing so, he or she may be able to find underreported income, fake debt or even padded payrolls. These kinds of unethical business practices not only affect the business, but can affect the outcome of a divorce settlement.
If inaccuracies in reported income are noticed, a forensic accountant may have to impute income to your spouse. Imputing income is the process of deciding a good representation of his or her "true" income.
High-asset divorces naturally bring with them a ton of paperwork that will detail assets and debts. Understandably it can be extremely confusing and intimidating as one goes through the process. With the help of a lawyer and a comprehensive divorce team, that anxiety and confusion can hopefully be mitigated.
Source: Forbes, "Why A Forensic Accountant Belongs On Your Divorce Team," Jeff Landers, Sept. 4, 2014