Investigating Financial Disclosures in Divorce Proceedings.
How do you know when to dig into your spouse’s finances and assets? There is no clear answer but if you are asking yourself that question, you probably have a reason.
- Does your spouse have a reason to conceal assets or income?
- Does your spouse own a business?
- Do you keep separate finances?
- Has your spouse reported a sudden or unexpected drop in income?
- Does your spouse own rental or commercial properties?
- Does your spouse own intellectual property?
- Does your spouse own assets of undetermined value?
To examine the integrity of your spouse’s financial disclosures, an investigation may be warranted. To maximize your return on investment, you should consider hiring a firm which utilizes financial investigators, forensic accountants, and digital forensic examiners.
Financial investigators conduct deep web searches of both public and private databases (Lexis Nexis) to uncover the spouse’s professional relationships and undisclosed assets through independent data sources.
A forensic accountant reviews documents such as tax returns, bank statements, and other financial documents to determine the accuracy and completeness of the information presented. A forensic accountant will discover discrepancies which indicate the possibility of an undisclosed asset. This helps narrow the scope of the financial investigator’s research.
A financial investigator will locate the actual undisclosed asset such as real estate or business interests and undisclosed bank/brokerage accounts along with balance and last deposit.
For example, after reviewing of a tax return, a forensic accountant may believe the spouse’s depreciation schedules indicate the possibility of undisclosed real estate. A financial investigator will then locate the undisclosed real estate and determine whether the property is being rented and for how much. If the assets cannot be located through traditional means (e.g. offshore assets), a digital forensic investigation of the spouse’s digital devices (e.g. laptops, smartphones) may be warranted.
Working together as a team, a multidisciplinary financial investigation firm will corroborate financial disclosures with independent sources. The goal is to help inform the court’s decisions regarding support payments and division of assets.
While many firms utilize a forensic accountant for the entire investigation, financial investigations and investigative accounting are best treated as separate disciplines. A forensic accountant is an expert at reviewing financial documents of all types. A financial investigator is an expert at locating and examining open source intelligence (independent data). Further, the billable rate of a financial investigator is half what a forensic accountant charges. You get better results for less money and in less time.
This article does not constitute legal advice or specific advice of any sort. Be sure to consult with your family law attorney and other appropriate professionals as each situation is different.