Owning a family business with their spouse is a dream that many people share. Once this happens, the business becomes a focal point of the relationship. That doesn’t become a problem unless the couple decides to divorce. At that point, the business can become a major source of contention.
If you’re going through this type of situation and aren’t intimately familiar with the finances of the business, there are a few factors that you should consider. Each of these may point to sudden income deficit syndrome (SIDS), which occurs when the party who knows about the business’s finances uses the business to hide assets that should be divided in the divorce.
Drop in income that coincides with marital issues
It might not be readily evident what’s going on with the company’s finances, particularly if you don’t know anything about the income. One way that this may be noticeable is that your ex never hinted about money problems with the business until the marriage dissolved. Once the divorce is filed, they may suddenly claim that the business doesn’t have any income.
Altered business records
The business records are often one of the first things to check when SIDS is suspected. This can occur in a variety of ways, such as having false payment accounts or hiding cash receipts. These might be unearthed if you have a forensic accountant look over the finances of the company.
Your ex may not be thrilled about you trying to dig into the business’s money affairs, but being persistent is critical. Working with someone familiar with these matters can help you to protect your interests.