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Working With Forensic Accountants During Divorce
When a divorce involves significant disputes over financial matters, the knowledge and advice of a forensic accountant may prove invaluable.
July 19, 2009 /Marriage - Relationships PR News/ -- Working With Forensic Accountants During Divorce
Article provided by Abbott & Abbott, P.C.
Visit us at www.abbottandabbott.net
In some divorces, the division of valuable assets is clear. Although separating spouses may disagree over cherished photographs or sentimental figurines, sometimes both parties can agree upon the shared martial assets and readily account for all income.
In other situations though, the division of assets is not as straightforward. One spouse may have concerns that the other is hiding assets, or spouses may disagree about their shared lifestyle, which can be relevant for determining alimony.
If you are preparing for a divorce in the latter situation, with significant disputes related to financial matters, your attorney may call upon a forensic accountant for assistance in preparing your case. The advice of a forensic accountant can prove invaluable, helping to ensure that the divorce settlement is based upon full disclosure of information.
The Role of the Forensic Accountant in Family Law Disputes
In essence, forensic accountants analyze money. By sifting through complex financial documents, forensic accountants develop an accurate assessment of the relevant financial situation. When forensic accountants become involved in family law disputes, they evaluate when money is coming into the family, where assets are stored, and how assets are being distributed. Within this context, they examine assets for three primary purposes: child support, alimony, and property division.
In Georgia, child support levels are guided by a clear formula. This formula considers the gross income of both parents, including the value of any fringe benefits such as the use of a company vehicle. Accordingly, to determine the appropriate amount of child support it is necessary to have a complete accounting of each parent's gross income.
In contrast with the formulaic nature of child support, the granting of alimony is much more discretionary. The court will consider factors such as the length of the marriage, the ability of one spouse to pay, and the needs of the other spouse. This ability and need depends largely upon the income of each spouse, though, which therefore requires a truthful reporting of each spouse's income.
Finally, the forensic accountant can play an essential role when evaluating assets for property division. Property division can only be fair with a full understanding of the marital assets. If both spouses have not been actively involved in the management of family finances, one might not be aware of all investments. Alternatively, if one spouse is attempting to conceal assets, it may be nearly impossible for an untrained person to find these assets. A forensic accountant can investigate and review finances to determine whether there are hidden assets and to ensure that the property division accounts for all assets.
When is a Forensic Accountant Necessary?
Not every contentious divorce requires the expertise of a forensic accountant. However, there are some circumstances where the knowledge of a forensic accountant is likely to be particularly valuable.
Most commonly, forensic accountants become involved in family law disputes when one or both spouses are self-employed. The accountant can ensure that one person is not using business accounts to hide marital assets. A business owner can manipulate business accounts in innumerable ways; a trained forensic accountant can review business transactions and business accounts to ensure that assets are properly classified and disclosed. Additionally, a forensic accountant can assign a value to the business and analyze any distinctions between separate and marital property within the context of a family business.
This is not the only time forensic accountants become involved, though. A forensic accountant may be helpful when there is simply a dispute over the reported income or assets of either party. Sometimes one spouse will report income levels that simply do not align with the spouse's apparent lifestyle or with the shared marital lifestyle. A forensic accountant can investigate to determine whether the spouse has misrepresented his or her income.
Ultimately the necessity of working with a forensic accountant depends upon the individual circumstances. If you suspect that something is amiss, it is worthwhile to investigate more fully, relying upon the knowledge and advice of a trained professional.
Article provided by Abbott & Abbott, P.C.
Visit us at www.abbottandabbott.net
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