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 Mexico, forensic accountants play a crucial role in divorce litigation, particularly in cases involving high assets or significant community property. New Mexico is a community property state, meaning that all property acquired during the marriage is considered jointly owned by both spouses and should be divided equally upon divorce. When there is suspicion of financial fraud or manipulation, a forensic accountant may be hired by one or both parties to conduct a thorough investigation, often referred to as financial tracing or asset tracing. This process involves analyzing various financial documents and transactions to uncover any hidden assets or discrepancies that could affect the equitable division of marital property, as well as the determination of spousal and child support. The findings of a forensic accountant can be pivotal in ensuring that all assets are properly disclosed and that the financial settlement is based on accurate information. The use of forensic accountants in divorce proceedings is supported by state statutes and case law that govern the division of property and the determination of support payments in New Mexico.