Texas is a community property state. This means that in most cases, all property is acquired during the term of the marriage is considered to be equally owned by both spouses. This also applies to debt that the couple takes on. In a divorce, all community property will be divided equally between the ex-partners. In order to accomplish this, it is necessary to know exactly what their property is worth.
The termination of marriage requires the equal separation of debts and assets owned by the former couple. When the couple owns real property, such as a car or a home, then the division of assets may be straightforward and uncomplicated. Bank accounts and credit card debt can simply be split down the middle. However, when the former couple shared a financial portfolio or ownership of other sophisticated financial items, the division becomes more complicated. The owners may not even be sure of the true value of their possessions. This may be as true in a friendly divorce as in one where there is acrimony.
Forensic accountants have experience in unraveling complex economic situations and estimating the fair market value of financial instruments such as deferred payments, retirement accounts, stock options, trusts and other similar assets. They also have the tools necessary to discover hidden and unreported assets, such as a bank account that one spouse has concealed from the other.
Property division can often become a contentious part of the divorce process, especially in cases where one or both spouses have a high net worth. A divorce attorney representing one of the parties will often suggest the retention of one or more financial professionals to become a member of the client’s divorce team when circumstances so dictate.
Source: Forbes, “Why A Forensic Accountant Belongs On Your Divorce Team“, Jeff Landers, September 04, 2014
