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 Alabama, during divorce proceedings, particularly in cases involving high-asset or high-net-worth individuals, the accurate assessment of marital assets is crucial for equitable division of property, as well as for determining appropriate spousal and child support payments. Financial manipulation or fraud can significantly impact these determinations. To uncover any hidden assets or financial discrepancies, one or both spouses may employ a forensic accountant. Forensic accountants specialize in identifying irregularities in various financial documents and assets, including tax returns, bank and investment accounts, and tangible assets like real estate and luxury items. Their role involves tracing or tracking financial transactions to their origins to ensure a transparent and fair accounting of all marital assets. Alabama's legal framework, in line with equitable distribution principles, requires full disclosure of assets and accurate representation of each spouse's financial situation. Failure to disclose assets or fraudulent activity can lead to legal consequences and affect the outcome of the divorce settlement.