Some family owned businesses are managed by one member of the family. When this happens in a marriage, there is a good chance that only one spouse has an intimate knowledge of the business’ income. Unfortunately, this can lead to issues if a divorce occurs because the spouse who doesn’t know about the finances might not get what they are due.
The chance of sudden income deficit syndrome, which has been dubbed SIDS, occurs when the spouse who runs the business makes it look like it isn’t as profitable as what it was before the divorce. This often happens quickly, but a spouse who has been thinking about divorce for a while might have slowly been funneling money away.
Including a forensic accountant on your divorce team might help you to unearth SIDS. This professional can review various types of records to see if there is anything amiss. There are many different ways that the profits might be filtered away from the company. Fraudulent payroll or vendor accounts can help them to route money to a hidden account. Not reporting cash payments is another possibility.
SIDS is a major issue in divorces because it takes away money or assets from the innocent spouse, which creates a property division settlement that isn’t equitable. Uncovering SIDS helps to ensure that you get what you’re due in the divorce.
You have to take steps to protect your rights throughout the divorce, so be sure you’re carefully considering each option you have. Working closely with your divorce team can help you find out how each one might impact you now and into the future.