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 Virginia, during divorce proceedings, particularly in cases involving high assets or significant property, financial manipulation or fraud can greatly impact the division of marital property, as well as spousal and child support determinations. Virginia is an equitable distribution state, meaning that marital property is divided in a way that is equitable, but not necessarily equal. If one party is suspected of hiding or misrepresenting assets, a forensic accountant may be employed to conduct a thorough investigation. This process, known as tracing or financial tracing, involves meticulously following the money trail to uncover any concealed or misrepresented assets. The forensic accountant's findings can be crucial in ensuring an accurate assessment of each spouse's financial situation, which is essential for a fair division of assets and proper calculation of support obligations. The use of forensic accountants in divorce litigation is recognized by Virginia courts and can be a critical component in protecting the financial interests of the parties involved.