Divorce and Your Business
The division of property in a divorce can be one of the most complicated aspects of the process, but couples with shared business assets face considerably more complex challenges. It is not uncommon for couples to become confused by how business assets are divided and whether they are considered marital property at all.
However, with the proper legal counsel and a willingness to work civilly together, both parties can easily navigate the division of professional assets in the state of Michigan. While it is crucial that you speak with a family law attorney before proceeding, we have answered some of your most common questions to help you move forward with greater knowledge.
Categorization of Business
Before anything else can be done, divorcing couples must evaluate whether their business is legally separate or marital property. To establish whether or not a business is a marital property, an attorney may ask whether the business was acquired during the course of the marriage, where the startup funds came from, and how each spouse financially contributed to the business.
It is a common misconception that because a business was established prior to the nuptials that it is not marital property. Plenty of spouses invest significantly in their partner’s business using shared funds, which results in increased income, both in the present and in the future.
Once the business is categorized as either separate or marital property, the next step is figuring out the business's true value. This is no easy feat since business valuation is not as clear-cut as the valuation of a physical asset like a home or vehicle.
Legal professionals typically work with accountants and real estate appraisers to get a clear idea of the business's value. Only after this has been accomplished can a family law attorney progress forward.
Divorcing spouses may choose to operate separate aspects of the business, sell it, or continue working as business partners. Each situation is unique, so it is important to contact a credible attorney.
Grand Rapids family lawyers are highly experienced in navigating the complex world of divorce-related to business assets. They are happy to assist you as you move forward with your divorce proceedings.