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 Massachusetts, during divorce proceedings, particularly in cases involving high assets or significant property, financial manipulation or fraud can greatly impact the division of marital property, as well as spousal and child support determinations. Massachusetts 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 professional is skilled in uncovering financial discrepancies and hidden assets across various types of accounts and properties, including complex assets like cryptocurrency and offshore accounts. The process, known as financial tracing or forensic accounting, is crucial for ensuring that all assets are accounted for and that the division of property and calculation of support payments are based on complete and accurate financial information. The findings of a forensic accountant can be presented in court and may influence the court's decisions regarding asset division and support.