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Shrinking business assets can affect your property settlement

If you are going through a divorce with a spouse who owns a business, you must be alert to the signs of impending Sudden Income Deficit Syndrome (SIDS).

The insidious condition can have a sudden onset, or in retrospect, the symptoms may have been worsening for months. Either way, a clear sign that the condition is present is a noticeable shrinkage in the value of jointly-owned marital assets.

Those contemplating — or in the midst of — a divorce become more self-protective as they shift their focus from what will benefit the couple as a married unit to what benefits the individuals. The one who is financially savvier than the other can begin to squirrel away jointly-owned assets prior to the divorce petition ever being filed.

One of the easiest ways to do this is to manipulate assets that belong to the business. Below are some worrisome indicators that financial subterfuge way be underway:

-- The company pays one spouse's personal expenses.

This may never have seemed to matter before, but during divorce it can allow one spouse to claim that he or she has zero (or very low income), while also allowing the business to be devalued by the amount it pays out monthly for personal expenditures.

-- A formerly thriving business now appears to loom uncertainly over the precipice of failure.

Look at the timetable of the revenue stream turning into a dribble. Did business appear to fall off just when the marriage got shaky? Also, is the business-owning spouse still living the same lifestyle even while claiming poverty? Those bills are getting paid somehow. Follow the money.

-- The business owner balks at having the company valuated by a professional and avoids providing documents that can determine financial viability.

Forensic accountants can ferret out the truth by digging through documents to establish a business' true value. It's exceedingly difficult to misrepresent check copies and credit card and bank statements, documents to which you have a legal right to review. Also, financial professionals can appraise the true value of a company as opposed to a spouse having to settle for the owner's skewed perception of its worth.

Divorce results in both spouses having to face hard facts they may have chosen to avoid during the marriage. When your future bottom line will be affected if you continue to hide behind rose-colored shades, it's time to cast them off and get real about assets and liabilities.

Working closely with your Alpharetta family law attorney can help assure that you receive the full amount you deserve in your divorce settlement.

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Hecht Family Law
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Alpharetta, GA 30004

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