Business holdings are sometimes the bread and butter of divorce cases. These holdings can often be considerable, especially if the business has been successful. One thing that people have to watch for when they are going through a divorce is if a spouse claims the business suddenly isn’t making any money.
Sudden income deficit syndrome, which is deemed as SIDS in these cases, is a problem because it is often associated with a business owner manipulating the books or moving holdings elsewhere in an effort to hide the money so that it isn’t part of the divorce’s property division process.
There are many different ways this can happen. One of these occurs when the business makes phony payments to companies or contractors that aren’t real. This is a way for the business owner to move those funds to another place while making it seem like they aren’t part of the business any longer.
Typically, spouses who are going through a divorce that involves a business will need to have the business valuated. This process gives you an accurate look at the value. You might also need the help of a forensic accountant who can help to trace complex money trails. Documents, including tax statements and information collected by the government, might also help you to find out if SIDS is an issue in your divorce.
When you are going through a divorce, keeping yourself protected is vital. You need to make sure that you are getting the settlement that is due to you. Knowing your rights and sticking to your plan can help you start your new life off in the best way possible.
Source: Forbes, “If Your Husband Owns A Business, Watch Out For SIDS (Sudden Income Deficit Syndrome) Once Divorce Proceedings Start,” Jeff Landers, accessed March 24, 2017