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 Washington State, during divorce proceedings, the division of marital or community property, as well as determinations of spousal and child support, can be significantly impacted by financial manipulation or fraud. Washington is a community property state, meaning that all property acquired during the marriage is presumed to be owned jointly by both spouses and should be divided equally upon divorce. If there is suspicion that one spouse is hiding or misrepresenting assets, either party may hire a forensic accountant to conduct a thorough investigation. This process, known as financial tracing or forensic accounting, involves examining various financial documents and assets, including tax returns, bank and investment accounts, and physical assets like real estate and luxury items, to ensure an accurate representation of the couple's finances. The findings of a forensic accountant can be crucial in court to ensure an equitable division of assets and fair determination of support obligations. Attorneys often recommend the use of forensic accountants in high-asset divorce cases to protect their client's financial interests.