The Role of Forensic Accounting in California Divorces: Is It Worth It?

If there are concerns about undisclosed assets, forensic accounting can help identify hidden income and ensure an equitable settlement. If your spouse is found to be hiding income during your divorce, then you need the help of a forensic accountant.

It’s hard enough going through a divorce, but harder still when your ex is being dishonest about their finances. The team here at Bickford Blado & Botros can help you understand the role of forensic accounting in California divorces and whether you need one.

What Is Forensic Accounting?

Forensic accounting is a special type of accounting where detective-like investigative work is put in to find any hidden sources of money, like bank accounts, stocks, and even real estate. In a divorce, forensic accountants go over all kinds of financial documents, such as tax returns, bank statements, and business records, to make sure everything is properly listed and valued so that it can be divided properly.

Why Would You Need a Forensic Accountant in Divorce?

Financial complexities can make divorce proceedings more challenging, particularly when one party is suspected of concealing assets. If your spouse has a history of being secretive about money or there are complicated assets involved, you might need a forensic accountant on your team. These financial detectives can track down every receipt and transaction to ensure you receive a fair settlement.

Situations that may warrant the assistance of a forensic accountant include:

1. Hiding assets. If you have any suspicion that your spouse is hiding money or valuables, a forensic accountant can help track it all down. This can include things like secret savings accounts, hidden cash, or even offshore investments.
2. Business ownership. If one or both spouses have businesses, this can complicate settlement calculations. A forensic accountant can figure out how much a business is really worth and find any hidden income streams that should be factored into the division of assets and support.
3. Tax issues. Some attempt to hide their income by underreporting it on their taxes, but forensic accountants can ensure all income is properly determined and reported.
4. Finding extra income. If you believe your spouse is earning more money than they’re reporting, forensic accountants can help find additional income sources, like side jobs or unreported earnings.
5. Determining fair support payments. If your spouse says they’re broke, but they’re living the same lifestyle they were living previously, forensic accountants can help figure out the source of their spending habits, which could affect matters like spousal support or child support.

In a divorce, it’s important to know what you’re working with, especially when it comes to money. So, if your spouse has a tendency to hide assets, underreport income, or if there are complex financial situations like businesses or investments, a forensic accountant could be the key to unlocking the full financial picture.

Is Hiring a Forensic Accountant Worth It?

After understanding the role of a forensic accountant, the next step is determining whether their services are necessary in your case. To do that, you need to weigh the cost against any potential benefits, and that all depends on your situation. Here are a few factors to consider:

1. Complex finances. If your divorce involves a lot of assets, investments, or businesses, forensic accounting could be very helpful. The more complicated the finances, the more important it is to have a professional on your side.
2. Dishonest spouse. If your spouse has given you a reason to doubt them in the past, especially when it comes to money, then a forensic accountant could be a lifesaver, and the sooner you bring them in, the sooner you can get to the bottom of it.
3. Litigation. If your divorce is likely to end up in court, forensic accountants can help provide the evidence you need to support your case. They can offer testimony that can make a big difference in the court’s final decision.

If your divorce involves hidden assets, businesses, or significant financial discrepancies, the cost of a forensic accountant may be a small price to pay for the peace of mind and the fair settlement you’ll receive in the end.

FAQs

Q: Can a Forensic Accountant Find Hidden Cryptocurrency in a Divorce?

A: Yes, they can. While it might seem elusive, blockchain technology leaves a permanent trail of transactions. Forensic accountants are trained to follow these trails, even if the cryptocurrency is stored in anonymous wallets or across different platforms. A forensic accountant can analyze transaction patterns and find income that would otherwise stay hidden.

Q: What Happens if My Spouse Spends or Hides Assets After We File for Divorce?

A: If your spouse tries to hide or spend assets after the divorce is filed, they can incur significant penalties. Forensic accountants can track financial transactions, identify irregularities, and help prove the concealment of assets. It’s important to document any suspicious behavior and bring it to your attorney’s attention so the court can take appropriate action.

Q: Can Forensic Accountants Track Down Assets Hidden Outside the U.S.?

A: Yes. Forensic accountants work with international financial systems, databases, and legal professionals to uncover offshore bank accounts or investments. They can also identify patterns of money transfers or asset movement that could suggest that money is hidden abroad. While international financial investigations can be complicated, forensic accountants have the skills and resources to navigate cross-border financial situations.

Q: Can Forensic Accountants Help Uncover Hidden Debts in a Divorce?

A: Yes, forensic accountants can help uncover hidden debts in a divorce. If one spouse is trying to conceal debt such as credit card debt, loans, or other liabilities, a forensic accountant can trace it, analyze spending habits, and track debt sources. By reviewing credit reports, loan applications, and bank statements, they can uncover debts that may have been deliberately hidden and make sure that both assets and liabilities are properly accounted for in the divorce settlement.

Advice at Every Turn

If you suspect your spouse is hiding assets, or there are financial discrepancies, or if you just need professional help to steer your way through your divorce, don’t hesitate to reach out.

At Bickford Blado & Botros, our team is ready to guide you through every step of the process and explain how a forensic accountant can protect your interests. Contact us today to schedule a consultation, and let’s get to the bottom of it together.

 

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