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When divorcing a business owner, watch for financial red flags

For many divorcing spouses, hidden assets are a legitimate concern. Whether to spite the other party or to shield themselves from financial loss, some people attempt to secretly withhold money throughout their divorce.

Although they could illegally hide assets in offshore accounts or undisclosed "gifts" to family members, spouses who own a small business might try to take advantage of their company. If you do not have the same access to the business as your spouse does, they may act on the opportunity to misrepresent its financial standing.

Without knowing the exact details of your spouse's company, you might still notice signs that they might be hiding assets, which could affect your divorce outcome. For example, if they mention that the business faces a crisis or sudden financial loss, it's possible that they are taking funds out of the company and secretly placing them in a separate account. They may also refuse to discuss any financial matters of the business soon after the divorce process begins.

Behind the scenes, the business owner could be purposefully diminishing the company's value, paying for as many expenses up-front as possible, delaying sources of income until after the divorce or co-mingling business and personal funds. Any of these actions could lead to an unfair settlement or divorce award. Honest reporting of assets, debts and sources of income is the key to equitable distribution in Florida - and this includes any business assets that legally count as marital property.

However, avoid jumping to conclusions; speak with an attorney if you suspect that your spouse is hiding assets. Such a situation requires a careful, professional investigative approach. During the divorce, you can also seek an independent business valuation as part of determining your overall marital assets.

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