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4 things to know if a business is part of a divorce

A business is a tremendous asset for many people. While it is true that many businesses will end up shuttering their doors, a successful business is a major factor in the property division process if you are going through a divorce. When you are going through a divorce, you must keep a close eye on the claims your ex-husband is making regarding the business. 

#1: The business can be handled in a variety of manners

Dividing the business during the divorce might be challenging. You might continue to run the business in the same way you run it now. Some people who work together to run the business handle things in this manner. This is an option only if you and your ex can keep up business-like communication. Another possibility is that you can sell the business and split the profits. Another option is that you can let one party buy the other side out.

#2: Valuation is crucial

You must ensure that the assessment of the business is accurate. This is the only way that you can factor the business into the property division settlement. The valuation takes a host of factors into account. This includes the assets, debts, income and other points of the business. This information is valuable no matter how you plan to handle the business. You can use the valuation to divide the business holdings, decide how much you will sell the business for or determine a buyout price for the business.

#3: Sudden income deficit syndrome might occur

Not all people who are going through a divorce are forthcoming about financial matters. Some people might try to make it seem like a business isn't as profitable as what it truly is. In some cases, your ex-husband might claim that the business has suddenly taken a downturn. This might be the case if he's been planning the divorce for a while. Sudden income deficit syndrome is the term many people use to address this issue.

#4: A forensic accountant can help

You might need to hire a forensic accountant to help find out if statements about the business and other assets and debts are factual. This professional uses a host of information to see if anything is amiss. This includes looking into public records, tax documents, bank accounts, ledgers and any other place where he or she can find valuable information. If you find anything amiss, you should address those issues promptly.

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