Property division unravels every aspect of a divorcing couple’s financial situation. However, some cases are more contentious than others.
When there are complex considerations – multiple income streams, businesses or investments, one party significantly wealthier than the other or evidence points to financial infidelity – lifestyle analysis often brings every detail to light.
By investigating, analyzing and drawing reasonable conclusions, the process determines the marital standard of living, or the couple’s spending habits to keep living comfortably. It can guide in divvying up marital properties equitably or fairly, so both parties continue with the same lifestyle after settling the divorce.
Establishing a comprehensive financial picture
Forensic accountants often sit with the concerned party and their legal counsel to discuss why they requested the procedure. Doing so helps in setting expectations and narrowing down to critical points.
After gathering paperwork, such as cash and check accounts, loan records, work benefits and tax documents, the forensic team can now assess if the parties spend more than they earn and check for potential discrepancies. Then, they can establish if a spouse is:
- Hiding, underreporting or undervaluing assets and liabilities
- Using marital money or resources to fund illicit activities
- Not disclosing all sources of income to evade their alimony or child support responsibilities
Lifestyle analysis is only one of the tools used to obtain a clear depiction of a divorcing couple’s wealth. Another way is through financial asset tracing. As the name suggests, it follows paper trails and identifies financial irregularities. As methods evolve, digital receipts or transfers might also show nuances that manual options may not catch.
Finding out the financial truth
Lifestyle analysis is much like detective work, looking for clues and patterns for the full view of things. That being said, it can quickly become technical. Divorcing couples must know they do not have to deal with it alone. With so much on the line, speaking with an experienced advocate ready to fight for their rights can help them uncover the truth and secure their financial future.
