The family business is likely a source of pride for you and your spouse. It may also be the primary source of income for the home. While it’s not a pleasant thing to think about, you must consider what will happen to that business if you and your spouse opt to divorce.
There are four things that can happen to the business. You may continue to run it as a team, sell it, close it, or have one spouse buy the other out. While you may think that’s the biggest challenge you’ll face during divorce because of the business, there’s another possibility to think about.
How familiar are you with the finances of the business?
Sometimes, only one spouse is familiar with the finances of the company. This means that they could alter the books to make it look like the business isn’t as profitable as it really is. Informally, this is known as sudden income deficit syndrome or SIDS.
There are many ways that SIDS can occur. Failing to record cash transactions or creating fraudulent payroll or vendor accounts are two common methods. Adding a forensic accountant to your divorce team may help you to unearth SIDS so you can handle things appropriately regarding the company.
Determining what to do during the property division process can be a challenge. It’s imperative that you learn your options so you can decide what’s best for your life. Whether you’re working things out through a collaborative method or going through a divorce trial, you should have someone on your side who understands the situation and can help you determine what avenue to pursue.