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 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 Washington State, the role of a forensic accountant in divorce litigation is to provide expertise in uncovering financial discrepancies and potential fraud within the marital or community property and income declarations. Washington is a community property state, meaning that all property and debt acquired during the marriage are considered owned equally by both spouses. Therefore, accurate financial representation is crucial for equitable division upon divorce. Forensic accountants are hired to conduct financial tracing or asset tracing to ensure that all assets, including those that may be hidden or undervalued, are identified and properly valued. This process can affect the division of assets, as well as spousal and child support determinations. The findings of a forensic accountant can be pivotal in court decisions, as they help to present a clear financial picture and ensure that both parties receive a fair settlement based on the true value of the marital estate.