18 Sep The role of forensic accountants as investigators in high-value property settlements
Article summary:
High-value property settlements often involve trusts, businesses, overseas assets and even cryptocurrency, making them far from simple. Forensic accountants often play a a vital role in high-property settlements acting in one of two ways – as a joint single expert to provide independent valuations of assets, or engaged by a single party to investigate financial records, uncover hidden assets, track unusual transactions and make sure there’s full disclosure. In this article, we’ll focus on the second role.
In this article:
- What is a forensic accountant?
- What does a forensic accountant do in a divorce?
- The dual role of a forensic accountant in property settlements
- The role of a forensic accountant in high-value property settlements
- How forensic accountants work with your family lawyer
- Working with the Toomey Family Law team
When high-net-worth couples separate, it’s not just a matter of dividing a house and a few bank accounts. It can mean untangling decades of accumulated wealth. Things like business interests, family trusts, overseas investments, and even cryptocurrency can all take financial separation from straightforward to a complex headache.
One of the biggest challenges in a financial situation like this is making sure that all the couple’s assets are identified, valued and disclosed properly. That’s where forensic accountants step in. They work alongside your family lawyer to make sure everyone can see the full financial picture by uncovering hidden complexities, discovering any missing financial information and making sure the eventual property settlement is based on accurate information.
So, what exactly does a forensic accountant do in a divorce, and why are they so important in high-value property settlements?
What is a forensic accountant?
Forensic accounting is a specialist practice area of accounting that investigates financial misconduct. You might see forensic accountants in use in a wide variety of ways, from corporate and institutional to healthcare, crime and, of specific interest to us in family law, property settlements.
Forensic accountants are typically skilled at auditing, accounting and investigating, but the roles they perform can be quite varied. These could include:
- Collecting financial data
- Analysing financial records
- Investigating any signs of financial misconduct, such as unusual transactions or accounting discrepancies
- Interpreting financial data
- Preparing financial information for legal use
What does a forensic accountant do in a divorce?
When calculating and dividing the asset pool in a divorce, the law requires full and frank financial disclosure. Sometimes this can be made more difficult by complicated financial structures that are typically part of a high-value property settlement. So a forensic accountant works with your family lawyer to make sure this happens.
The dual role of a forensic accountant in property settlements
In family law, parties engage forensic accountants for one of two purposes:
- As a joint single expert whose role it is to provide an independent valuation of an asset, such as a business.
- As an expert for a single party whose role it is to dig into financial matters, investigating bank accounts, expenditure, debts and transactions and uncover whether money has been hidden, spent unnecessarily or wastefully or even siphoned off.
In this article, we’ll focus on the second role – forensic accountants engaged as investigators on behalf of a party who has concerns about how finances have been handled by their ex-partner.
The role of a forensic accountant as investigator in high-value property settlements
When it comes to high-value property settlements, a forensic accountant investigation can be indispensable simply because the financial situation can be much more complex. For example, high net worth property pools often involve:
- Family trusts and interlinked entities
- Business interests
- Overseas assets
- Cryptocurrency and digital assets
If one party fails to disclose all their income or assets, it can be challenging to track down without the help of a forensic accountant. But a forensic accountant can conduct a thorough financial investigation that lets you find the pieces of the puzzle that could be easily overlooked, misrepresented or deliberately hidden.
They can:
- Investigate bank accounts, debts and expenditure to identify if money has been siphoned off, hidden, spent unnecessarily or otherwise disposed of.
- Uncover hidden bank accounts by reviewing bank statements, loan records and transaction histories.
- Trace unusual transactions by following the flow of funds to see if money has been transferred, redirected or concealed.
- Review tax records to uncover discrepancies or unreported income.
- Review expenditures and earnings to analyse whether a person’s spending matches their declared earnings.
- Provide expert testimony by appearing before the Court to explain any complicated financial matters.
Without this level of investigation, important financial details could be overlooked or hidden, which could lead to an unfair property settlement.
How forensic accountants work with your family lawyer
A forensic accountant’s investigative work supports your family lawyer by creating a more transparent and balanced process. That’s because it allows both parties to proceed forward with all the information they need for a fair result.
Working with the Toomey Family Law team
At Toomey Family Law, we regularly work alongside forensic accountants in complex financial cases and high-net-worth property settlements. Their expertise complements our own. And together we make sure that every aspect of your financial separation is understood and accounted for.
If you’re going through a separation or divorce, contact Toomey Family Law today. Our team can guide you through the process of financial separation, and where appropriate, bring in trusted forensic accounting experts to support your case.
Reach out today.