These days, it’s not uncommon for a marriage to end in divorce. And financial issues are among the most common causes of marital breakdowns. Those problems also tend to spill over into divorce proceedings, leading to protracted battles over money. That is when it’s a good idea to have a forensic accountant on your side.
Forensic accountants in Carmel have the tools and knowledge necessary to comb through complex financial records to help the parties to a divorce come to a fair and equitable agreement. If you are going through a divorce, you’d want one working to protect your interests. To explain why, here are 10 reasons to use a forensic accountant in a divorce case.
1. A Forensic Accountant Increases Transparency
In most marriages, only one person is in charge of handling financial matters. And that puts the other party at a distinct disadvantage in a divorce. They may not have a complete picture of their financial situation, nor an understanding of how that situation evolved over time. Plus, the other party may have taken active steps to conceal assets or alter financial records for their own benefit. A forensic accountant can work backward to make sure both parties have access to a complete and factual accounting of their shared finances.
2. A Forensic Accountant Can Identify and Appraise Assets
To arrive at an equitable division of marital assets, both sides must agree on the value of the assets being divided. For obvious reasons, this creates an incentive for one or both parties to seek asset valuations that support their desired outcome. Forensic accountants have the skills needed to evaluate assets and their valuations to determine if they’re correct or if someone’s trying to tilt the scales in their favor.
3. They Can Locate Hidden Assets, Too
It’s not uncommon for a divorcing couple to dispute the value of various marital assets. But sometimes, one of the parties might go even further and attempt to hide assets completely. It’s another way to try and cheat their spouse out of a fair settlement. But forensic accountants have the expertise necessary to unravel the kind of financial trickery used to hide assets. They can foil those attempts by locating hidden assets and making sure they receive an appraisal that’s fair to both parties.
4. Forensic Accountants Assist With Fair Child Support
When there are children involved in a divorce, it’s not unusual for the custodial parent to receive child support payments from their former spouse. The payments are typically calculated using the total income of the payee. And those payments can add up in a hurry. So it’s not unusual for the higher-earning spouse to look for ways to underreport their income to reduce their eventual child support amount. Forensic accountants can help spot the signs of underreported income to make sure they end up paying their fair share for their children.
5. They Assist With Fair Spousal Support, Too
Although spousal support payments aren’t mandatory like child support payments are, they can still be a point of contention in a divorce proceeding. And just as they might when it comes to child support payments, a higher-earning spouse might seek to conceal some of their income to reduce the odds that the court will order spousal support. Forensic accountants increase the odds that any spousal support order will reflect the needs of the spouse requesting it, rather than the desires of the one providing it.
6. Forensic Accountants Help Track Spending During a Divorce
Since most couples share bank accounts, they both must keep track of whatever money they withdraw from those accounts during a divorce. But if one or both parties make withdrawals without keeping a paper trail of where the money went, things can get messy. A forensic accountant can help to track and categorize expenditures and figure out where joint assets went when there’s no obvious paper trail. That helps to make sure neither party gets away with spending down assets while the divorce proceeds.
7. A Forensic Accountant Can Provide Expert Testimony
If a divorce case involves any complex financial matters, the decisions made by the court may hinge on each party’s ability to explain their side of the story in court. Forensic accountants have the qualifications to serve as expert witnesses in a court proceeding. They also have the experience and knowledge to explain even the most complex financial matters in a way that will make sense to the judge overseeing the case. In other words, they can swing the odds in favor of the party that retains their services.
8. Forensic Accountants Assist With Tax Analysis
In many cases, tax liabilities can be a serious issue that arises in a divorce proceeding. That’s because most couples file their taxes jointly. And disentangling shared tax filings is necessary before either party can go on with their lives post-divorce. Forensic accountants can help analyze a divorcing couple’s taxes to assist one or both with creating a post-divorce tax strategy. This is a critical step in getting off to a solid financial start when the divorce is final.
9. Forensic Accountants Can Help Examine Self-Employment and Business Records
If one of the parties to a divorce is self-employed or owns their own business, it is always challenging for the other party to gain visibility into their finances. And without the help of a forensic accountant, they may not have an accurate picture of how the other party’s business figures into the divorce. That leaves open the possibility of financial manipulation since the lines between a single-proprietor business and one’s personal finances aren’t always clear. And if the business represents a significant asset, a forensic accountant can assist in providing a valuation of the business.
10. Forensic Accountants Can Help Assess The Consequences of a Divorce Settlement
Believe it or not, getting a substantial settlement in a divorce isn’t always a completely positive outcome. For example, if one party gains exclusive control of properties in a divorce, they’re also taking on the costs associated with owning them. That means increased tax burdens, maintenance costs, and operating expenses. A forensic accountant can go through historical records to help assess what the consequences of a divorce settlement might be to each party. They may even advise on how to structure a settlement to avoid future liabilities.
Helping to Make Divorces More Equitable
As one of the premier accounting firms Carmel CA has to offer, we’ve had our share of experience dealing with divorcing couples. And wherever there’s a dispute over finances, hiring a forensic accountant is always wise. It helps to alleviate some of the stress that a divorce entails, and makes sure that both parties end up with an equitable settlement. So if you’re facing a divorce, contact the experts here at Savage Accountancy, APC. We’ll help you navigate your divorce and help you safeguard your rights in court. Divorce is never easy. But we’ll do everything we can to help make sure it’s financially fair to everyone involved.