Divorce often becomes more complicated when financial issues arise. Many couples turn to forensic accounting to sort through complex finances. But is it worth it? Knowing how forensic accounting works in divorce can help clarify its value.
Uncovering hidden assets
A forensic accountant can help find hidden assets in a divorce. If one spouse suspects the other of concealing money or undervaluing assets, a forensic accountant analyzes financial records and transactions to reveal the truth. This is particularly important in high-net-worth divorces or cases with suspicions of financial dishonesty.
Forensic accounting is often used in equitable distribution cases. This is where the court divides assets fairly but not necessarily equally, based on factors like the length of the marriage and each spouse’s financial contributions.
Valuing businesses and investments
For couples with businesses or significant investments, determining the value of these assets can be challenging. Forensic accountants assess the true worth of a business or investment, ensuring a fair division of property. By thoroughly accounting for all assets, they help prevent future financial disputes. This clear financial picture not only aids in fair settlement negotiations but also reduces the chances of money-related disagreements after the divorce.
Ensuring fair settlements
The courts may require detailed financial documentation, and a forensic accountant can ensure accuracy in valuing complex assets like businesses, stock options, and retirement accounts. The New Jersey Family Court follows the “Marital Lifestyle Doctrine.” This ensures that both parties maintain a similar standard of living after the divorce. As a result, accurate asset valuation becomes even more important in determining fair settlements.
Accurate financial assessment
Forensic accounting can be helpful in divorces with complex finances. It provides transparency, helping to achieve a fair and balanced outcome when necessary.
