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, or asset tracing, 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 New Jersey, forensic accountants play a crucial role in divorce litigation, particularly in cases involving high-net-worth individuals or complex asset portfolios. Their expertise in uncovering financial fraud and tracing assets is invaluable for ensuring an equitable division of marital property and accurate determination of spousal and child support obligations. New Jersey operates under an 'equitable distribution' model, which means that marital property is not automatically split 50/50 but is divided in a manner that the court deems fair. The insights provided by forensic accountants can be pivotal in revealing hidden assets or income, identifying discrepancies in financial disclosures, and providing a clear picture of each spouse's financial situation. This information is critical for the court to make informed decisions regarding asset division and support payments. The use of forensic accountants is not mandated by law, but attorneys often recommend their services to protect their client's interests and to ensure a fair outcome in the financial aspects of a divorce.