You must consider many factors when going through a divorce. One aspect many people overlook is the financial aspect. During a divorce, finances can become complicated, and it’s essential to have a clear understanding of all assets and liabilities. Forensic accounting in Scottsdale, AZ, can play a decisive role in ensuring a fair and equitable division of assets.
Why Is Forensic Accounting Important During Divorce?
During a divorce, finances can become complex, and it’s not uncommon for one spouse to hide assets or income. Forensic accounting can help uncover these hidden assets and provide a clear picture of the couple’s financial situation. This information can be vital in high net-worth divorce cases, where the stakes are high and the assets are complex.
Tracing Assets
One of the primary functions of forensic accounting during divorce is to trace assets. This process involves analyzing financial records to determine the source of funds used to purchase assets. For example, if one spouse purchased a property using funds from a joint account, the property would be considered a marital asset. However, if one spouse purchased a property using their separate funds, the property may be considered individual property. Forensic accountants can use techniques like bank statements and tax returns to trace assets and determine their actual ownership.
Identifying Hidden Income
Another critical aspect of forensic accounting in Scottsdale, AZ, during divorce is identifying hidden income. This problem can occur when one spouse fails to report income or understates their income to reduce support payments. Forensic accountants can analyze financial records to uncover unreported income and provide evidence to support their findings.
Determining the True Value of Businesses and Investments
In divorce cases, businesses and investments can be some of the most valuable assets to divide. However, determining the actual value of these assets can be challenging. Forensic accountants can use various methods, such as discounted cash flow analysis and market comparables, to determine the fair market value of businesses and investments to ensure a fair and equitable division of assets between the spouses.
If you need help with forensic accounting in Scottsdale, AZ, for your divorce, visit the Bridge Divorce Strategies website.
