Many individuals appreciate having the flexibility to generally do as they please when they have their own business. They like the idea of there being a direct correlation between how hard they work and how much money they make, as well. It shouldn’t come as a surprise, however, that divorcing spouses often fight over their family business just like any other valuable asset as their marriage comes to an end.
Many divorcing couples find it challenging to pinpoint the value of their family business. Thus, they may have an appraiser step in to determine that value to divide the property accordingly. Spouses who don’t opt for this may short-change themselves, especially if they aren’t or haven’t been in control of the company’s finances. The spouse who manages the business finances might have doctored the books to make the company look less profitable than it is.
How do spouses commonly hide business assets?
Many spouses who manage the financial books for their family business may do one of the following to hide its assets:
- Improperly record cash payments
- Deeding over valuable assets to other parties
- Create fraudulent vendor or payroll profiles or invoices that funnel money into a spouse’s personal account
- Overinflating business expenses to pocket the difference
The above-referenced tactics that spouses use when hiding business assets from their husbands and wives are endless. You owe to yourself to take a close look at the company’s books to see if any illicit activity is occurring before reaching a property division settlement in your divorce.