In the United States, a divorce occurs every 13 seconds. Unfortunately, that seemingly shocking statistic likely surprises very few people. When you think about divorce you probably associate it with words like “messy”, “stressful”, and “sad”. But what makes a divorce so messy? Sure, there are loads of emotional aspects to a messy divorce, yet that is often just the beginning.
The real mess often relates to the financial aspects of the divorce. While selecting good legal counsel is certainly the first step in a divorce, a good divorce attorney will likely direct you to hiring a forensic accountant.
Dividing marital property is probably the most challenging part of any divorce. The end of a marriage means separating many years’ worth of assets and debts. Although a divorce attorney is equipped to handle some of the more straightforward aspects of that division, complicated financial situations will probably require the expertise and skillset of a seasoned forensic accountant.
Today, we discuss the value and importance of adding a forensic accountant to your divorce team.
Forensic Accounting’s Role in a Divorce
From particularly complex financial circumstances to high-asset divorce cases, forensic accounting serves to meticulously assess the finances and paint a full financial picture of the divorcing parties. To achieve this, a forensic accountant will likely look at:
- Tax returns
- Credit card statements
- Bank accounts
- Property deeds
- Any relevant records and/or documents
In doing so, the forensic accountant will look to unearth any irregularities or unexplained behaviors. These numbers are analyzed thoroughly and recorded. If any issues are discovered, further investigation will take place. Auditing all of the records highlights how to properly divide assets and debts.
The findings of the investigation have a significant impact on the divorcing parties. From property division to child support to alimony, forensic accountants play a monumental role in the divorce proceedings. As such, it is common for both sides of the divorce to hire their own forensic accounting firm. In these cases, both forensics will typically meet with the attorneys in order to guide settlement negotiations.
Finally, forensic accountants are also called upon as expert witnesses in depositions or in divorce trials. In these scenarios, their professional opinion is relied on to accurately depict the financial intricacies at hand and testify to their viewpoint regarding the disputed financial issues. The other party will attempt to question and undermine the expert’s opinion and work product during discovery and cross-examination.
From business owners to high net worth individuals going through a divorce, forensic accounting is often the saving grace in an otherwise complicated, complex separation. Leaning on the expertise of a forensic accountant is helpful in a wide variety of scenarios, painting a clear picture of how assets and liabilities should be divided.
At Ellrich, Neal, Smith & Stohlman, P.A., our forensic accounting team boasts many years of experience throughout South Florida. Our firm’s litigation services department provides professional services to participants in the legal process. These services include forensic accounting, fraud detection and prevention, assistance with discovery matters, consultation, and expert witness testimony.
We provide litigation services in both federal and state courts in a wide variety of cases including brokerage fraud, shareholder disputes, class action litigation, personal injury, marital dissolution, contract claims, business damages, lost profits, business and contract disputes and criminal cases.
For more information about our Palm Beach Gardens or Miami offices or to speak with a forensic accountant, please contact us at your earliest convenience.