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Watch the accounts if you and your ex own a business

Going through a divorce can sometimes bring out the worst in people. You might think that your ex is going to be on the up-and-up with you, but that might not be the case. It is especially important that you take steps to make sure that you are protecting yourself throughout the divorce process.

One situation that requires some extra attention during a high-asset divorce occurs if you and your ex have a business. In this case, it is imperative that you take the time to make sure that everything about the business' finances and income is being reported correctly.

Exes sometimes try to hide income

If you don't play a central role in the daily running of the business, you need to have your guard up. Some people try to hide income when they are in the midst of a divorce. Some people refer to this as sudden income deficit syndrome, or SIDS.

SIDS is often an issue when your ex is the one who planned the divorce. In this case, he or she might have been hiding income for a while. This can be difficult to determine, so you might need to take a close look at what is going on.

Forensic accounting can help here

It might take a forensic accountant to determine if there are any assets or any income hidden. People who are trying to get away with SIDS will often try to employ very cunning methods. A forensic accountant will be able to pick out subtle clues that something is amiss that wouldn't be readily noticed by other people.

One of the things that they might do is create false payroll accounts to pay. Instead of going to an employee, the payroll actually goes right back to your ex through a hidden, or undeclared, account.

The same thing might happen with vendor accounts. This is one reason why you have to take steps to check and then double check everything that has to do with the finances of the business.

Go beyond the business' books

The business' books are only one of the places you need to check when you are trying to find out if SIDS is a factor in your divorce. You can also check public records, such as tax filing for the business and paperwork that is filed with government entities. Getting bank statements and other documents might also help.

The most important thing to remember is that only you can protect yourself here. Your ex isn't going to try to protect you, so make sure that you are watching out for yourself.

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The Barbknecht Firm, P.C.
1700 Alma Drive, B Tower
Suite 290
Plano, TX 75075

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