Knowledge and Insights

Love Them or Leave Them? Financial Considerations When Contemplating a Divorce

Unfortunately, only you can answer that question. According to, in the United States 50% of you are choosing to leave him or her and for second or third marriages that increases to 60% and 73%, respectively. The Centers for Disease Control and Prevention (CDC) reports the national average divorce and annulment rate in 2019 was about 2.7 per 1,000 people, which was down significantly from 2000 when it was 4.0 per 1,000 people.

The good news is that the divorcing trend has continued to decline over recent years – even with COVID-19 quarantines. The bad news, however, is divorce rates in 2022 are still projected to be about 45%. Additional speculation anticipates divorce rates to temporarily spike when the COVID-19 pandemic is behind us – where some couples may have only stayed together during the pandemic out of convenience.

If you decide the marriage can’t be saved, question whether marital assets were concealed or you won’t get your fair share out of the divorce, then the second call to make after retaining a divorce lawyer is to a forensic accountant. Using a forensic accountant in a divorce can help reveal important financial information that can facilitate divorce proceedings. The forensic accountant can help achieve complete financial transparency by uncovering hidden assets as well as providing independent asset valuations and income determinations, assess child support payments, and more to help facilitate an equitable division of assets. According to a Forbes article, most divorcing couples with intricate financial portfolios have a hard time dividing assets and liabilities between one another. Finances are a common cause of contention in divorce proceedings, so the services of a forensic accountant can be invaluable.

You should expect your forensic accountant to examine a variety of documents, including tax returns (personal and business), bank records (including loan applications), real estate records, insurance policies and court filings. With this information your forensic accountant can:

  • Verify income – Often in a divorce the higher-earning spouse under-reports their income in an attempt to minimize alimony and child support. A forensic accountant can help determine the actual income amount so that support can be accurately calculated by the court.
  • Uncover hidden assets – A forensic accountant is trained to identify discrepancies between what is reported and what actually exists.
  • Identify joint assets and liabilities – A forensic accountant’s input leads to more transparency around what is owned and what is owed.
  • Appraise Assets, Businesses and Properties – A forensic accountant has investigative and analytical skills to verify and explain financial data that is presented during an appraisal.

Even with a prenuptial agreement, a forensic accountant should be brought in when the parties cannot agree as to what the terms of the prenup mean. For example, in some states, wages earned during the marriage are community in nature and all assets purchased during the marriage with those wages are subsequently community assets. A prenup typically protects sole and separate assets, and can state that the wages will be the sole and separate property of the wage earner and that all subsequent assets purchased with those wages are then sole and separate assets to be retained by the wage earner. Additionally, a forensic accountant can help establish pre- and post- marriage assets. They can also help determine if the financial aspects of the prenup were adhered to during the marriage, (i.e., if the prenup called for a certain percentage of income to be deposited into a joint account).

According to “… 90 to 95 percent of the cases where forensic accounting experts are involved will be resolved without the necessity of a trial.” Mercadien’s Forensic and Litigation Support Services Group is comprised of seasoned professionals with the expertise needed to assist your legal team in various aspects of the divorce process.  And if your divorce falls into the other 5-10%, our forensic team has the credentials and experience (including testifying) needed to qualify and serve as an expert witness retained on your behalf.

If you have any questions regarding the financial aspect of divorce, or would like more information on the forensic accounting, litigation support and fraud investigation services we provide, please contact Frank Pina, CPA/CFF, CFE, CGMA, Managing Director at or 609-689-2319.

DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought.