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 South Dakota, during divorce proceedings, the equitable distribution of marital assets is a key concern, particularly in high-asset or high-net-worth divorces. State statutes require an equitable, though not necessarily equal, division of marital property. When there is suspicion of financial manipulation or fraud, such as hiding or undervaluing assets, one or both spouses may employ a forensic accountant to conduct a thorough investigation. This process, known as financial tracing or forensic accounting, aims to uncover any concealed or misrepresented assets to ensure a fair division of property. The findings of a forensic accountant can significantly impact the determination of spousal support and child support, as these are influenced by the accurate representation of each spouse's financial situation. The use of forensic accounting in divorce litigation helps to present a clear financial picture to the court, which is crucial for making informed decisions regarding the division of assets and support obligations.