A forensic accountant is generally an accountant with expertise in detecting financial fraud or manipulation in personal and business tax returns, bank accounts, investment accounts, retirement accounts, broker accounts, offshore accounts, cash, cryptocurrency, jewels, art, cars, yachts, airplanes, real estate, life insurance policies, and related financial documents. This financial investigation work is often referred to as tracing, financial tracing, asset tracing, or forensic accounting, and generally involves “following the money” by tracing a piece of financial information or data back to its source.

In divorce litigation—and especially in high-asset or high-net-worth divorces in which there is significant marital or community property—any financial manipulation or fraud of personal or business finances may have a significant effect on the marital or community property that is available for division, and on spousal support and child support payment amounts. One or both spouses in a divorce may hire a forensic accountant to discover any hidden assets or manipulated financial documents that may prevent the court from having an accurate accounting of the marital or community property assets and the spouses’ incomes.

In Kentucky, forensic accounting is a specialized field where accountants use their expertise to uncover financial fraud and manipulation within various financial documents and assets. This practice is particularly relevant in divorce litigation, especially in cases involving high-net-worth individuals or substantial marital assets. Kentucky follows the equitable distribution principle, meaning that marital property is divided in a manner deemed fair by the court, though not necessarily equally. A forensic accountant may be hired by either spouse to conduct financial tracing to ensure that all assets are properly disclosed and to prevent financial deception that could impact the division of assets, as well as spousal and child support determinations. The findings of a forensic accountant can be critical in court proceedings, as they help to provide a clear and accurate picture of each spouse's financial situation. Kentucky state statutes and case law would govern the admissibility and impact of the forensic accountant's findings in divorce proceedings.