Forensic accountants use their skills to investigate financial discrepancies and inaccuracies as they examine an individual or business’s finances. They research fraud and other misrepresentation, including money laundering. Their work allows lawyers to prosecute criminals and insurers and others to resolve disputes.
And in a divorce?
Divorce and relationship breakdown, hardly easy to go through at the best of times, can become especially drawn-out and stressful if financial disputes arise. That is particularly the case where the separating couple have complex financial affairs. Where there is an extensive investments and assets portfolio, for example, the pair may simply not be able to agree on its estimated value.
Equally, it’s not unusual for one half of the partnership to attempt to dispose of assets, or conceal them, to keep them out of the proceedings. That can happen especially where one partner:
- Runs a successful business they don’t wish to be considered in the proceedings
- Earns a lot more than the other, and doesn’t want to pay child or spousal maintenance
- Takes primary control of the couple’s finances, making it easier for them to hide assets
There can also be problems where there are high-value assets, business dealings or an international aspect involved, or in separations involving high-net-worth individuals.
Yet according to divorce law, couples must be entirely honest and open about their money, while the division of assets needs to be fair to both sides. There are only some, clearly defined, situations in which assets can legally not be disclosed – for example if these were acquired before the union.
Forensic accountants can play a key role, not least where there are concerns over potential fraud, concealed assets or unrevealed earnings.
What will a forensic accountant actually do?
When it comes to divorce proceedings, forensic accountants can be vitally important. And that’s especially so where there are worries over concealed assets, fraud or undeclared income. These professionals can work for both parties, or just one half of the separating couple.
Their role essentially is to work out the estimated value of hidden assets to allow them to be incorporated during the financial proceedings of a divorce process. Such assets include property, pensions, businesses and so on.
Forensic accountants will do this using past business performance, possible projected earnings and market information on competitor organisations which have a similar makeup.
The main benefit in using this service is to avoid the stress, money and time of having to reopen financial proceedings at a later stage. They can also:
- Advise on the tax implications of disposing of assets – Capital Gains Tax, for example, can have significant ramifications in a divorce where sizeable assets are being transferred
- Act as expert witnesses in court if proceedings reach this stage
- Trace assets and achieve full financial disclosure if one partner feels that their soon-to-be former spouse could have hidden away assets to keep them out of the divorce settlement
Even if you are just at the stage of talking about divorce or separation, and discussing how much your joint assets might be worth, forensic accountants can really help smooth the path for an easier legal process later on.
How Hayes can help
At Hayes Forensics, we understand that the financial side of a divorce can often serve to make a tricky situation even more stressful. We’re here to help with our knowledge and expertise, especially when it comes to things like hidden assets, offshore trusts and international matters. We remain discreet, calm and professional at all times.
And we’ll be with you every step of the way, from the minute proceedings are served to final recovery. Talk to us today.