What is a Forensic Accountant? What You Need to Know
Any divorce is difficult, but a high net worth divorce can be especially complicated. This is because the more assets a couple has, the more there is to divide. This can make the process long and complex. Sometimes, with so much on the line, one or both spouses may try to keep certain assets hidden. In situations like this, you may need a forensic accountant to get involved. Read on for more information regarding forensic accountants and what to do if you believe your spouse is hiding assets.
Do I Need a Forensic Accountant?
A forensic accountant may become involved in the event of a high net worth divorce, though this is not the only time a forensic accountant will be hired. A high net worth divorce occurs when the couple has a combined net worth of $1 million or more. During a divorce, both spouses will need to fully disclose all of their assets in order to divide them equitably. Some couples choose to partake in mediation. Mediation involves a third party helping the couple decide upon the matters of their marriage in a fair and equitable way. Other couples, especially those involved in high net worth divorces, often turn to litigation. This means your divorce will go to trial and the matters of your divorce will be decided by a judge. In either event, it is important to have full financial disclosure. Failing to disclose all of your assets can be seen as fraudulent. If a forensic accountant finds something suspicious, they will report it to the court, who will have to inform the IRS. If you are involved in a high net worth divorce, you may want to consider hiring a forensic accountant to ensure that all assets are accounted for.
What are the Benefits of a Forensic Accountant?
A forensic account can be essential when it comes to valuating assets such as deferred compensation arrangements, retirement plans, and life insurance policies. Additionally, they can valuate tangible items, such as art, antiques, or rare collectibles, all of which will need to be accurately appraised.
One of the most important things a forensic accountant can do is determine one’s true income. To do this, they will scrutinize business records, bank accounts, tax returns, and investment portfolios.
Additionally, a forensic accountant can uncover unethical practices, such as:
- Creating fake debt
- Padding payroll
- Under-reporting income
- Overpaying creditors
- Transferring assets to dummy corporations
- Purchasing expensive items with undeclared cash
If you have any questions about hiring a forensic accountant, or the best ways to handle a high net worth divorce, contact our firm today.
CONTACT OUR FIRM
If you need an experienced legal team to guide you through your divorce, contact Townsend, Tomaio & Newmark L.L.C today.