When a couple divorces, both spouses must provide a full disclosure of their assets and debts. The court uses this information to make decisions on property division, spousal support and child support.
If you suspect your spouse may be hiding assets, you may want to engage the services of a professional forensic accountant.
Types of hidden assets
Any property a person fails to disclose during divorce proceedings constitutes a hidden asset. The individual may try to prevent his or her spouse from accessing investments, stocks, mutual funds, insurance policy proceeds, bonds and cash. A forensic accountant specializes in locating these items and fairly determining their value.
Methods of hiding assets
Sometimes, the person hides assets by cashing out accounts to buy luxury goods. Examples include collectibles, vehicles, antiques, fine art and jewelry. He or she may place cash and investments in remote offshore accounts or stash property in a local safe deposit box. However, simply selling or giving an asset to a friend or family member can obscure its existence. Often, the individual plans to reclaim this asset after the divorce.
If your spouse owns a business, the forensic accountant can review its financial documents for signs of hidden assets. Your spouse may fail to report income or profits, postpone valuable projects until after the divorce, take cash out of the business or pay wages to employees who do not actually exist. These actions artificially decrease the value of the business to limit the share the spouse receives.
Forensic accounting strategies
To locate hidden assets, a forensic accountant uses his or her auditing knowledge and experience to trace potentially obscured property. He or she may:
- Interview friends and family members
- Review tax returns and other financial documents to look for discrepancies
- Locate cryptocurrency and other alternative investment types
- Perform a cash flow analysis
When significant assets are at stake in your divorce, it may behoove you to protect your livelihood with the help of a forensic accountant.