Forensic Accounting in Divorce: How to Uncover Hidden Assets and Income
March 28, 2025
Divorce is often one of the most challenging experiences in a married person’s life, especially when financial disputes are involved. When one spouse suspects the other of hiding assets or concealing income, it can add an additional layer of stress and mistrust to what can already be a difficult process. That's where forensic accounting comes into play.
At Iwanyshyn & Associates, we understand that financial issues can become contentious during a divorce, especially when one spouse hides assets or income from the other. With the help of a skilled divorce attorney, forensic accounting can help you uncover hidden assets and income and reach a fair and equitable resolution in your divorce.
Forensic Accounting and Its Role in Divorce
Forensic accounting is a specialized field of accounting that involves investigating and analyzing financial records to uncover discrepancies, fraudulent activities, or concealed funds. Unlike traditional accounting, which focuses on preparing financial statements and complying with tax laws, forensic accounting dives deeper into financial data, using investigative techniques to identify patterns, inconsistencies, and missing information.
When it comes to divorce cases, forensic accounting plays a critical role in identifying hidden assets, unreported income, or misrepresented financial information. Forensic accountants will work alongside divorce attorneys to provide the evidence necessary to reach an equitable division of marital property.
The Importance of Uncovering Hidden Assets
Failing to identify and account for all assets during a divorce can lead to an inequitable settlement that disadvantages one spouse. Since Pennsylvania is an equitable distribution state, the court aims to divide marital property in a fair, though not necessarily equal, manner. If one party hides assets or underreports income, asset division can be skewed unfairly.
Signs That Assets Might Be Hidden During a Divorce
In a divorce, especially a contested divorce, it’s not uncommon for one spouse to attempt to hide assets or underreport their income to avoid sharing or splitting them with the other spouse. However, there are often telltale signs that something is amiss. Some red flags that forensic accountants and divorce attorneys look for include:
Sudden changes in spending habits: If a spouse suddenly begins making large cash withdrawals, extravagant purchases, or unusual financial transactions, it could indicate an attempt to move assets out of reach.
Complex financial structures: Hidden assets are often concealed by transferring them into trusts, offshore accounts, or shell companies. If the financial picture seems overly complicated, it may warrant deeper scrutiny.
Unexplained debts or loans: A spouse may fabricate loans or debts to reduce the overall value of the marital estate.
Discrepancies in income reporting: If the income levels stated on tax returns differ from lifestyle expenses, it could signal undeclared income or hidden assets.
If you recognize any of these during your divorce, you’re not alone. Many individuals go through similar experiences during divorce proceedings. An experienced divorce attorney can connect you with a reputable forensic accountant who can help uncover your true financial state.
How Forensic Accountants Identify Hidden Assets
Forensic accountants use a variety of tools and methods to trace financial activity and uncover discrepancies in a marital estate. Some of the most common techniques include:
Analyzing tax records: Tax filings often contain valuable insights into income, investments, and other taxable activities. Comparing tax returns over several years can highlight changes that might warrant further investigation.
Examining bank statements and credit card bills: By meticulously reviewing banking and credit card records, forensic accountants can identify unexpected withdrawals, transfers, or unusual spending patterns that may point to hidden funds.
Investigating business financials: If one or both spouses own a business, this is often a prime area for concealing income. Forensic accountants can assess the business’s revenue, expenses, and overall financial health to determine if money is being underreported or siphoned.
Evaluating real estate holdings: Real estate can sometimes be used as a method for hiding wealth. Forensic accountants may trace property ownership and assess purchase or sale histories to identify hidden dealings.
Uncovering deferred compensation or retirement contributions: Some spouses may attempt to defer bonuses, stock options, or retirement contributions until after the divorce is finalized. A detailed examination can make sure these assets are accurately accounted for.
We can help connect you with a forensic accountant and walk you through the findings and next steps.
What to Do If You Suspect Hidden Assets
If you suspect that your spouse is hiding assets or concealing income, it’s crucial to act swiftly. Waiting too long to address the issue can make it more difficult to trace financial activity and recover hidden funds. The primary steps you should take include:
Gather financial documents: Start by compiling all relevant financial records, including bank statements, tax returns, pay stubs, and investment account records. These documents will serve as a foundation for forensic analysis.
Monitor financial activity: Keep an eye on any unusual spending or account changes during the divorce process. Make a note of any suspicious activity for future analysis.
Reach out for legal help: Consult an experienced family law attorney as soon as possible. An attorney can connect you with a forensic accountant and guide you through the steps you should take to protect your finances.
At Iwanyshyn & Associates, we’re here to advocate for your rights and protect your financial well-being. We work tirelessly, fighting to get our clients their fair share of marital property, even when financial dishonesty is involved.
How Our Firm Works with Forensic Accountants
At Iwanyshyn & Associates, we collaborate closely with experienced forensic accountants to dig into financial records and gather the evidence we need for your case. This partnership allows us to identify financial red flags, address discrepancies, and present clear findings to the court if necessary. Whether your case involves high-value assets, business interests, or complicated financial arrangements, we have the resources and knowledge to help.
Our priority is always to level the playing field. We understand how daunting it can be to confront financial dishonesty, especially during a divorce. We’re committed to helping you uncover the truth and achieve a fair settlement.
Consult an Experienced Attorney Today
Divorce is an emotional and difficult process, and financial uncertainty can make the situation more challenging. At Iwanyshyn & Associates, we’re dedicated to helping our clients resolve financial disputes with clarity, fairness, and precision. Leveraging forensic accounting can shine a light on hidden assets and make sure they’re accounted for in your divorce settlement.
If you suspect your spouse is concealing assets, it's important to consult an attorney as soon as possible. With offices in Allison Park and Cranberry Township, Pennsylvania, we serve clients throughout the surrounding areas. Contact us today to schedule a consultation.