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 or secreted 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.

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 Indiana, during divorce proceedings, the division of marital assets and determination of spousal and child support can be significantly impacted by financial manipulation or fraud. Indiana is an equitable distribution state, meaning that marital property is divided in a manner that is fair but not necessarily equal. If one party is suspected of hiding or misrepresenting assets, a forensic accountant may be employed to conduct a thorough investigation. This process, known as financial tracing or forensic accounting, involves examining various financial documents and assets, such as tax returns, bank and investment accounts, and physical assets like real estate and luxury items, to ensure an accurate representation of each spouse's financial standing. The findings of a forensic accountant can influence the court's decisions regarding asset division and support payments. It is important to note that any attempt to conceal or dissipate assets can lead to legal consequences, including potential penalties and an unfavorable outcome for the offending party in the divorce settlement.