The Use of Forensic Accountants and Private Investigators to Find Hidden Assets in Divorce
In Indiana when you file for divorce, there is a rebuttable presumption that the Court is to divide the marital estate or assets 50/50. Sometimes there are allegations that a party has hidden monies and other assets of the marriage that has to be divided. There is a rule that the division of the marital estate cannot exceed its entire value.1
This means that if the total value of the marital estate is a liquid sum of $100,000, and the court follows the presumption, each party would receive $50,000. However, if $50,000 has been hidden or secreted away by a spouse, the division should be $75,000 to each spouse. If the secret hiding of this money has occurred over a long period of time, it is difficult or impossible for most litigants and their attorneys to determine by the discovery of information. Yet no attorney or litigant wants to forego $25,000. The numbers suggested having secreted from the marital estate may be much higher and more easily supported by inference from available records.
However, where is that money? This needs to be determined to present an accurate financial snapshot for the divorce court to determine and properly divide the total marital estate. This is where other professionals may be of significant assistance to attorneys and their clients. Namely, a forensic accountant is normally a CPA who has special training or experience looking at financial documents to determine if all monies are accounted for. Thus, after discovery, it may be beneficial to hire a forensic CPA to determine if the available financial documents support the belief a spouse has secreted away marital assets. In CPA-speak, “the numbers just don’t add up.”
The second step is typically retaining a highly skilled private investigator, who through a variety of computer and other investigatory techniques, can locate bank accounts and assets all over the world. Almost all transfers from a marital estate leave some paper or digital footprint, somewhere. Particularly in today’s computer age, a good private investigator can be worth his or her weight in gold in finding hidden marital assets.
When these are located, then third-party discovery may be conducted to assess the value, condition, and ownership of the assets for use in the divorce proceedings. In other words, lawyers have a vast toolbox of legal resources through the discovery process that may be aided by third-party professionals to ensure in all ways a just and reasonable division of the marital estate—this includes hidden monies or other assets. However, this is the burden of the party seeking this sum to be included to prove; a court may ultimately award attorneys fees or expenses in locating these sums.
Thus, it is important for litigants to understand that secretion of assets may be accounted for in a divorce. However, it has been explored and proven at trial; and there are a number of legal and professional resources to do so. We hope this blog helps you understand that secreted assets are still part of the marital estate, but they must be located and proven in the divorce evidence. This blog is written by attorneys at Ciyou & Dixon, P.C. who handle divorces cases of all types across the state. This blog is written to provide general information and is not a solicitation for legal services or legal advice. It is an advertisement.