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Mark Abzug

Know how to handle a business during a divorce

On Behalf of | Apr 28, 2017 | High Asset Divorce

Going through a divorce is difficult unless it is one that doesn’t include anything like assets or children. The more assets that are included in the process, the more difficult it becomes to divide everything up.

The inclusion of a business in the divorce is something that brings up a whole new level of issues and problems. This is especially true if only one spouse handles the affairs of the business.

If you are the spouse who doesn’t have much to do with the daily events of the business, you need to be aware of something that might happen if your spouse switches to self-preservation mode. Your spouse might begin to try to hide income.

Sudden income deficit syndrome (SIDS) is a phenomenon that happens more than some people might realize. The spouse who is working with the business might claim that the income from the business has slacked off. This might happen right before the divorce is filed, but it can also happen after the filing.

There are several ways that money from the business might be hidden. The person might create false payment accounts so they can funnel money into their own — and unknown to you — accounts. Cash transactions might not be reflected in the books.

Taking a look at the lifestyle your ex is leading can give you an idea of whether SIDS is a factor or not. This is something that can also be discovered by a forensic accountant, so don’t discount having one on your divorce team.

You must make sure that you think about your own interests when you are going through a divorce. You don’t want to walk away with the debt while your ex lives the high life on the hidden assets.

Source: Forbes, “If Your Husband Owns A Business, Watch Out For SIDS (Sudden Income Deficit Syndrome) Once Divorce Proceedings Start,” Jeff Landers, accessed April 28, 2017