When You Need a Forensic Accountant in Your Maryland Divorce

If you suspect your spouse may be committing financial misconduct during your divorce case, a forensic accountant can help uncover their wrongdoing. Although full financial disclosure is mandatory in Maryland matrimonial matters, a spouse may sometimes conceal assets in an attempt to prevent a fair distribution of property, or minimize their spousal and child support obligations. In such cases, a forensic accountant can work with your divorce attorney to help track down the missing assets to ensure you receive an equitable share of marital property and achieve a just financial outcome.

Key Takeaways

• Forensic accountants can be essential in Maryland divorce cases involving financial misconduct and concealed assets to help ensure a fair financial outcome.
• A forensic accountant can have broad investigative responsibilities, including locating offshore accounts, valuing complex holdings, tracing income, conducting a lifestyle analysis, and tracking cryptocurrency.
• Forensic accountants may be necessary in high-net-worth divorces or when a spouse suspects hidden assets due to red flags such as unusual withdrawals, expenses that do not match reported income, or a complicated pay structure for a self-employed spouse.

What is a Forensic Accountant?

A forensic accountant is a financial professional, such as a CPA, who combines their accounting and investigative skills to uncover hidden assets. While the division of assets is often a contentious issue in divorce proceedings, they can serve a vital role in cases where a spouse has taken steps to conceal income, assets, and property. Depending on the facts of the case, a forensic accountant’s responsibilities in a divorce can include the following:

• Locating offshore accounts: Spouses who attempt to conceal assets in divorce often keep their money in offshore accounts. A forensic account can identify red flags such as unexplained wire transfers and look at tax returns for unreported foreign income.
• Investigating hidden or concealed funds: Forensic accountants can locate undisclosed bank accounts, properties, and other financial resources. Their investigation typically includes analyzing financial statements, tax returns, bank records, and other documents.
• Valuing businesses, real estate, and other property: In cases where a spouse owns a business, significant real estate assets, or other valuable holdings, a forensic accountant can help ensure the property is identified and properly valued.
• Conducting a lifestyle analysis: A forensic accountant can compare a spouse’s reported income against their actual spending to uncover hidden wealth.
• Tracing a spouse’s income: In situations where a spouse owns a business and underreports their income, a forensic accountant can analyze financial records to determine the true income and ensure the settlement is based on accurate information.
• Providing expert testimony at trial: In addition to conducting behind-the-scenes investigations into a spouse’s financial matters, a forensic accountant can also provide expert testimony in the event a case goes to trial.
• Tracking cryptocurrency: A spouse who holds cryptocurrency assets might think that if they do not disclose their digital wallet in discovery, it will never be found. However, a forensic accountant can track cryptocurrency holdings by using special blockchain analysis tools, examining tax returns, and reviewing bank statements to identify purchases.

The comprehensive investigative work conducted by a forensic accountant can help ensure that property distributions and both spousal and child support determinations are based on an accurate and complete picture of the marital estate.

Why Would You Need a Forensic Accountant in Divorce?

Forensic accountants are essential in high-net-worth divorce cases involving businesses and other complex financial holdings. They can also be crucial in situations where a spouse suspects the other is hiding assets. If there are suddenly unusual or large cash withdrawals, you notice discrepancies concerning your spouse’s expenses, or your spouse is self-employed and has a complicated pay structure, it may be necessary to investigate these issues further in divorce.

Additionally, forensic accountants can serve as financial detectives to prove a spouse dissipated marital assets on a paramour. Although it is not necessary to establish marital misconduct to obtain a divorce in Maryland, being able to demonstrate that marital funds were squandered on carrying out an extramarital affair can often result in the innocent spouse being awarded a larger monetary award.

Engaging a forensic accountant early can help guide discovery requests and prevent the other party from manipulating financial records. It can also level the playing field in cases where one spouse financially relied upon the other during the marriage, and reduce the unfair advantage the higher-earning spouse may have.

What Happens if a Spouse is Hiding Assets?

Hiding assets in divorce is not only unethical, but it is also illegal. In the event a spouse was found to be concealing assets from the other during divorce proceedings, they may face a number of consequences, depending on the specific facts and circumstances of the case. For example, the concealing spouse might be subject to sanctions and held in contempt of court. The court might also award a larger portion of the marital property to the innocent spouse and compel the other to pay the attorney’s fees associated with locating the undisclosed assets.