If you have always relied on a family business to make ends meet, the thought of having to step away from that security might make you sick. When you are going through a divorce, this is a real possibility.
For people who aren’t involved in the daily financial matters of a business, having to deal with that in the case of a divorce isn’t easy. You must ensure that you take steps to protect your interests in the divorce.
What should I watch for regarding the business?
You should pay close attention to what your now-ex says about the business in terms of the income and profits. If your ex starts claiming that the business isn’t making money all of a sudden around the time of the divorce, you might be dealing with sudden income deficit syndrome. This is actually a sign that your ex is up to no good and is trying to hide the profits and income from the divorce proceedings so that he or she gets a better settlement in the property division.
How can I ensure everything is on the up-and-up?
One way that you can protect yourself is to hire a forensic accountant to go over the records of the business. Using public records and reviewing the records from the business might help this professional to let you know if there is any thing suspicious about the books for the business.
A business is often of the largest, if not the largest, asset in a divorce. You must make sure that you do everything you can to ensure proper valuation of the business during the divorce proceedings.
Source: Forbes, “If Your Husband Owns A Business, Watch Out For SIDS (Sudden Income Deficit Syndrome) Once Divorce Proceedings Start,” Jeff Landers, accessed April 21, 2017