Aho & Associates assists attorneys and their clients reach equitable distribution settlements by providing forensic examination services that can reveal concealed assets and income, transferred wealth, and other fraudulent activity.

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A Reckoning of Accounts

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The California Family Code recognizes a fiduciary relationship between spouses.  This relationship imposes a duty of the highest good faith and fair dealing on each spouse and prohibits each spouse from taking any unfair advantage of the other.  This means that each spouse must, among other fiduciary duties, provide the other spouse access to financial records, must provide complete and accurate information affecting transactions involving community property, and must account and hold any benefits springing from any transaction involving community property if the other spouse did not consent to the transaction.

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Even if spouses decide to seek a divorce, their fiduciary relationship continues throughout the dissolution process.  This includes an obligation to provide financial disclosures to each other that are accurate and complete.  These disclosures include income and expense information, property disclosures, a schedule of assets and debts, tax returns, and community asset and obligation valuation statements.  Spouses must also disclose any investment opportunities they were presented with from the date of separation.

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Unfortunately, because financial issues often dominate the dissolution agenda, spouses routinely breach their fiduciary relationship by submitting misleading financial disclosures, hoping their representations will be accepted at face value.  While California requires spouses to prepare comprehensive financial information, the information and supporting documents can be manipulated using only modest effort.  If disclosures are checked or questioned, spouses will frequently continue on their course by attempting to dodge subsequent discovery efforts.

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The likelihood that spouses might attempt to create an unfair advantage by submitting misleading financial disclosures is greater when:

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• one spouse has superior knowledge of the marital finances

• there is a wide disparity of earnings between spouses

• there is a business through which the spouse can hide or surreptitiously transfer compensation or marital assets

• the marital finances are unusually complicated or are based on difficult-to-trace cash transactions

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When one spouse enjoys this kind of dominant financial position, that spouse will often also take a calculated and pre-meditated approach to the divorce.  It isn’t unusual for these spouses to begin re-structuring their finances years before the run-up to the date of separation in order to present a more advantageous and convincing financial profile. 

 

We can help

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We offer a number of forensic services to family law attorneys and their clients.  These include:

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• Forensic examinations to determine the character of property held by spouses

• Consulting in discovery efforts and document production requests

• Analyses of financial disclosures for completeness and accuracy

• Investigations for hidden and transferred assets

• Income analyses for calculating child support and spousal support

• Assistance to business valuation experts to ensure that business financial data used in the valuation process are not fraudulent or misstated.