There are many things that can cause problems during a divorce. While you may not realize it can become an issue, the family business is one. A huge problem exists when one spouse knows about the finances of the business and the other spouse doesn’t.
If your ex is the one who’s familiar with the business’s finances, you should be aware of sudden income deficit syndrome. This occurs when the person who handles the company’s money makes it appear as though the business isn’t as profitable as it truly is. The dip in income occurs right around the time the divorce is initiated or close to the time that the marriage really began to deteriorate.
How might someone hide income from a family business?
There are many ways that a person can hide business income. Some of these include:
- Creating fraudulent payroll or vendor accounts
- Writing fraudulent invoices
- Pocketing cash payments without recording them
A forensic accountant might be a good addition to your divorce team. They can check into things to try to unearth signs of SIDS. You may also know that something is wrong if your ex’s lifestyle remains the same despite claims that the business is suddenly failing.
Making sure that you protect your interests is imperative during a divorce. If you own a family business, be sure that you look into the finances of that company since it can have a major impact on the property division settlement. Your divorce team should include someone who’s familiar with these matters so they can help you learn your options and watch for signs that something is amiss.