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 Michigan, forensic accountants play a crucial role in divorce litigation, particularly in cases involving high-net-worth individuals or substantial marital assets. Their expertise is utilized to uncover financial fraud or manipulation within various financial documents and assets, including tax returns, bank and investment accounts, and tangible assets like real estate and luxury items. The process, known as financial tracing or forensic accounting, involves meticulously tracking financial transactions back to their origins to ensure a fair and accurate assessment of marital property and individual income. This assessment is vital as it impacts the division of assets, as well as the determination of spousal and child support payments. Michigan law requires an equitable division of marital property in divorce cases, and the discovery of hidden assets or financial discrepancies by a forensic accountant can significantly influence the outcome of property division and support obligations. It is not uncommon for either spouse to engage the services of a forensic accountant to ensure transparency and protect their financial interests during divorce proceedings.