| The sad fact is that almost 50% of all marriages end in divorce. It’s also a fact that most marriages that end in divorce are in trouble long before the divorce petition is filed. This fact provides ample opportunity for either spouse to hide assets and income. The more animosity there is between the couple, the greater the chance that one or both is hiding income and assets.
Many spouses have significant experience hiding income or disguising non deductible expenses for income tax purposes. It’s a simple matter for them to apply these skills to their pending divorce problems. Typically there will be little direct evidence that the income ever existed. If the client spouse suspects or knows that the other is engaging in these practices, a forensic accounting investigation is often necessary to provide supporting evidence of the hidden income.
We bring valuable skill sets to the divorce process:
- Analytical skills and industry experience necessary to investigate a wide variety of financial documentation.
- Classic skills of a CPA coupled with financial investigation tools.
- Ability to testify as an expert witness.
- Advisor to the attorney in finance, tax and business practices
When a Closely Held Business is Involved
Usually a forensic examination is considered when one spouse is actively involved in running a closely held or single owner business. In this scenario, the opportunity to manipulate income and hide assets is limited only by the spouse’s creativity.
- The business may be used to purchase assets that are hidden from the other spouse.
- Financial Statements are often manipulated to hide income when a divorce is contemplated.
When there is financial complexity
Individuals with significant income such has highly paid executives and professionals such as doctors, attorneys and accountants often have significant discretionary cash. Even if this type of opposing spouse’s primary income is from salary and wages, there will be plenty of cash available for investing and diverting from the marital unit
- A forensic accounting investigation may reveal previously unknown bank accounts, investments and other assets.
When there are claims of separate property
When a premarital agreement exists
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