Beware of sudden dips in business revenue around divorce
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Beware of sudden dips in business revenue around divorce

On Behalf of | Jun 19, 2020 | divorce

During a divorce, each party has to consider their own best interests. If your ex runs a family-based business, you might have to look into the possibility that they will try to use the business as a way to protect their financial future. This may lead them to try to funnel money away from the company so that it doesn’t seem as profitable as it really is — thereby reducing the value of the business and their income.

This is known as sudden income deficit syndrome, but it might not actually be sudden. Typically, the dip in income starts when the person who has knowledge of the business’ finances realizes that there is going to be a divorce. If they’re considering divorce for a long time, the shift in income might be very subtle and occur over a long period of time. If the divorce is sprung on them, the dip will happen suddenly around that time. 

One of the ways that you can unearth this type of situation is to have a forensic accountant on your divorce team. This professional can utilize a host of measures to find out what’s going on with the company. Not only can they review the company’s records, but they can also check public records and look at social media postings and similar information for other evidence that the business is more profitable than it seems.

Because the property division settlement must be equitable, there can’t be any hidden income, including business revenue. You deserve to find out exactly what’s going on so that you can make the decisions you feel are necessary during the divorce. If you find that there are discrepancies in what’s being reported and what’s going on, the court might get involved and your ex may face penalties.


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