Locating, valuating, and dividing marital assets during a divorce can be complicated, especially when there is a large marital estate, one of the parties is self-employed, owns a company, or has a pension. Forensic accountants can provide valuation, location, and income tracking services to find all of the marital assets, calculate the value of each asset, and testify in court regarding their findings if needed. This blog explores the role of forensic accountants in Indiana divorce cases.
The division of property in Indiana is controlled by two statutes: I.C. 31-15-7-4 and I.C. 31-15-7-5. The first statute defines the property that the court will divide in a divorce. This property is called marital property; all of the combined property is the marital estate. Under the statute, marital property is all of the property of the parties, “whether: (1) owned by either spouse before the marriage; (2) acquired by either spouse in his or her own right: (A) after the marriage; and (B) before final separation of the parties; or (3) acquired by their joint efforts.” So, even if you owned it for years before the marriage, purchased it during the marriage with your own money, or received it as a gift during the marriage, it is now a part of the marital estate and subject to division by the court. It should be noted here that the court does not divide the marital estate by awarding each specific item of personal property to one party or the other. The parties are expected to reach an agreement on how to divide personal property and provide the agreement to the court. If the parties cannot agree on the disposition of personal property, the court will require each party to provide it with a list of personal property, indicating the value of the item, and which party should receive it. The court will then award the items to the parties based on each of their lists, evidence submitted at trial, and the value of the item. The presumption of the court when dividing marital assets is governed by the second statute.
Indiana law assumes that an equal division of marital property is just and reasonable, however, it provides a list of some factors the court will consider if a party wishes to rebut the presumption. These factors include: “(1) The contribution of each spouse to the acquisition of the property, regardless of whether the contribution was income producing. (2) The extent to which the property was acquired by each spouse: (A) before the marriage; or (B) through inheritance or gift. (3) The economic circumstances of each spouse at the time the disposition of the property is to become effective, including the desirability of awarding the family residence or the right to dwell in the family residence for such periods as the court considers just to the spouse having custody of any children. (4) The conduct of the parties during the marriage as related to the disposition or dissipation of their property. (5) The earnings or earning ability of the parties as related to: (A) a final division of property; and (B) a final determination of the property rights of the parties.”
When a party in a divorce is unsure of their spouses, or even their own, economic circumstances (factor three above) because one or both parties own a business, the other party takes care of all the finances, their spouse has irregular income from self-employment, or he or she simply does not share financial information, a forensic accountant can locate all marital assets, even hidden ones, determine where business income came from and where it was spent, and verify financial information and asset valuations (Ageras). Forensic accounts may also testify in court as expert witnesses, verifying and describing the assets, value of each, and the best way to divide the estate.