What Is the Role of a Forensic Accountant in an Illinois Divorce Case?

 Posted on April 17, 2020 in Division of Assets

Dividing property fairly in a divorce only works if both spouses are honest about their finances. If one spouse is unwilling to disclose their finances or is attempting to hide assets, a forensic accountant can help track down the missing assets. These professionals investigate personal and business finances for discrepancies that can affect divorce proceedings.

A DuPage County, IL asset division attorney can help you determine whether a forensic accountant is needed for your 2026 case.

Why Might You Need a Forensic Accountant in Your Illinois Divorce?

In Illinois, marital property is divided fairly during divorce, but this does not always mean an equal split. 750 ILCS 5/503 outlines how property is classified as divisible or not. "Marital" property will be divided. "Non-marital" property will not be.

Property acquired by either spouse during the marriage is presumed to be marital. The law directs courts to divide marital property in equitable portions based on the couple's situation. This kind of division only works if the court knows what the marital estate actually contains.

Spouses may do a number of things to keep money from their partner in divorce. They may try to hide assets so they cannot be divided. They may also commit "asset dissipation." Asset dissipation happens when a spouse spends marital money for personal reasons after the marriage has started to break down. Forensic accountants are not lawyers, but they can analyze financial records and identify signs of hidden assets or dissipation.

What Does a Forensic Accountant Do in an Illinois Divorce Case?

"Forensic" means able to be used in a court of law. Forensic accountants may perform several functions during divorce proceedings. They may locate income or accounts that weren't disclosed by one spouse. They can value a business or professional practice so its value can be considered during property division. If needed, they can also trace whether an asset is marital, non-marital, or a mix of both.

Forensic accountants often trace where income came from, where it went, and check if the reported income is accurate. They will look through source documents to determine what someone makes rather than relying on self-reporting of income. They are able to testify in court and work with attorneys to present evidence.

What Kinds of Records Does a Forensic Accountant Review in an Illinois Divorce?

A forensic accountant needs to build a picture of what kind of financial history a person has. To this end, they may ask for several years of:

• Personal and business tax returns

• Bank and brokerage statements

• Credit card statements

• Business contracts, invoices, and payroll records

• Loan applications

Loan applications may be reviewed to see if someone reported more income to a lender than they reported to the court.

Why Do High-Asset Divorces Often Benefit from Using a Forensic Accountant?

High-asset or high-earning couples often have more complicated financial portfolios to divide in a divorce. Businesses, real estate, investment accounts, and other assets require valuation before being divided. The process can be long and emotionally taxing. Complex assets also create more opportunity for spouses to fail to disclose assets fully.

There are a number of common tactics high-earning spouses may try in order to avoid property division. Forensic accountants are trained to look for these. Some include:

• Routing income through a business entity that exists only on paper

• Adding a friend or relative to the payroll who does not actually do work for the company

• Creating false debts to make the estate look smaller

• Delaying a bonus, contract, or commission until after the divorce is final

• Moving funds into accounts held in someone else's name

It can be especially difficult to determine the value of investment or offshore accounts without specific financial training. Significant wealth may also be hidden in hard-to-value assets such as cryptocurrency.

What Happens If a Spouse Is Caught Hiding Assets in Illinois?

Courts take the concealment of assets seriously. A judge can consider asset hiding or dissipation when dividing the estate. They may award the other spouse a greater portion of the marital estate in response to asset hiding or dissipation. Hiding assets can also harm a spouse’s credibility in other disputed parts of the divorce case.

Dissipation claims have strict rules and deadlines. Tell your attorney as soon as you think your spouse may be hiding or misusing money. Bringing up your concerns early gives your attorney adequate time to investigate further and hire a forensic accountant if needed.

Call a Naperville, IL Divorce Attorney Today

Bringing in a forensic accountant isn't right for every case, but it can be invaluable for some. High-asset divorces in particular may benefit. If you're wondering whether hiring a forensic accountant is right for your case, take the opportunity to consult with an attorney sooner rather than later.

Attorney Don Pesce has nearly two decades of experience in many areas of family law. He is court-approved in DuPage County to serve as a guardian ad litem, child's representative, or attorney for the child.

Call Pesce Law Group, P.C. at 630-352-2240 today to schedule your free consultation with our DuPage County, IL asset division lawyers.