At its elemental level, divorce is really all about division. Division of the union, division of the assets and division of the debt. It’s about taking whatever the parties put into the large marital pot and splitting it up between them. Sounds pretty simple – right? Well, not really.

For people with complex finances, the notion of dividing assets and debts, assessing lifestyle and arriving at a reasonable resolution can be a formidable task. While divorce lawyers are well qualified to deal with the division of assets or assessment of support, the question that are to be answered by forensic accountants are: What is that value to be divided? Where did the money go during the marriage? How much is at stake?

The above is true even in relatively amicable divorces; division of assets can prove to be a knotty mission with all sorts of complicating factors that an expert will need to untangle.

The following are the typical examples of when a forensic accountant may be helpful, useful and even necessary:

  1. Corporate Interest, Partnership or Sole Proprietorship: Many times, a divorce will involve a situation where one or both parties are business owners. The non-owner spouse is typically entitled to a portion of that business interest assuming it was acquired during the marriage. In many cases, this can be the largest marital asset to be divided between them and requires special expertise to make the assessment. In that case, a forensic accountant will need to sift through the books of the business to determine the standard of value and premise of value. This is complicated by the fact that the goodwill of the business, as well as other intangible assets, must be valued and divided between the parties. Such analysis required both objective data and subjective scrutiny based on the particulars of the business in question.
  2. Corporate Benefits: A forensic accountant will need to determine the value of vested and unvested portions of stock options, restricted stock units, performance shares, or the benefits from other long-term incentive plans. The forensic accountant will compile the relevant data and calculate the value of these assets using complex mathematical models and projections.
  3. Dissipation Claim: Sometimes, a spouse will make a claim that one party spent money on non-marital ventures. This could be related to an extramarital affair, gambling, etc. In that event, a forensic accountant will need to sift through bank statements to determine the amount that had been dissipated and the proper compensation to the non-dissipating spouse. The accountant will also need to assess the nature of the claim so that the appropriate analysis can be accomplished.
  4. Determination of Income: A tax return may tell only part of the story in terms of what a party’s income was during the marriage and will be moving forward. That is because a business owner experiences significant leeway in terms of deductions and the payment of personal expenses. A forensic accountant will need to examine the relevant financial data to see what should be “added back” to the income so that the parties can arrive at the true cash flow experienced during the marriage. This analysis is important when arriving at the value of a business interest as well as when you are assessing alimony, child support, or another financial obligation.
  5. Lifestyle & Spending: In New Jersey, the assessment of alimony and (sometimes) child support depends on how the parties lived during the marriage and how they spent their money. Such an analysis may require a thorough accounting of all expenditures during the marriage by each party over a period of several years. At the end, spreadsheets are generated with an analysis of spending and lifestyle that the parties use in arriving at the appropriate level of support.
  6. Tax Analysis: Tax issues arise in almost every divorce, big and small. If a property settlement or support award is not structured wisely, tax implications can arise for either or both parties. That is why it is crucial to seek the advice of an accountant, particularly with the new tax laws coming into effect in the near term.

As you can see, having a forensic accountant on your team may be invaluable as you navigate the complicated and, sometimes, adversarial, world of divorce. Only you and your attorney can decide how, when and why an expert forensic accountant may be necessary.


Eliana T. Baer is a contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or