If you’re contemplating divorce in Michigan, you should know how the state’s “equitable distribution” rules apply to property division. Under equitable distribution principles, the courts divide marital property fairly but not always equally in divorce.
Marital property includes anything you or your spouse gained or earned during your marriage. If you or your spouse started a business while you were married, the court will likely treat it as marital property. This means that even if you ran the business alone, a judge might still give your spouse a share. You might not lose the business, but you could have to give your ex a portion of its value or give up other property to keep it. A family law attorney can help you understand how the courts treat marital assets like businesses in divorce and advocate for fair results on your behalf.
Does My Business Count as Marital Property?
If you started the business before you got married and kept it entirely separate from your marital assets, you might be able to keep it. However, if the business grew during your marriage, or if you used marital money to fund it, a judge might count those additions as marital property. Your ex could also claim a share if they helped you with your business, even without pay. For example, if your spouse stayed home with the children to give you time to manage your business, the court will consider how their efforts contributed to the company’s value.
Valuation of Businesses During Divorce
Before a court can divide a business, it needs to determine what the business is worth. Professionals like business appraisers can evaluate businesses by reviewing financial records, assets, income, and other key details. These appraisers might also look at your customer base, contracts, and how much income the business will likely bring in. Both sides might hire their own appraisers if they disagree on the value. This step matters because it often shapes how much you’ll need to pay or trade if you want to keep full control of your business.
Options for Dividing Business Interests in Divorce
Dividing a business in a divorce doesn’t always mean you’ll lose it or have to sell it. Here are some other ways you could divide your business in a divorce:
- Buyout: One spouse keeps the business and pays the other for their share, either in full as a lump sum payment or over time as a deferred buyout.
- Offset with Other Property: You keep the business, and your spouse takes other assets of equal value, like cash, investments, or the house.
- Sell the Business and Split the Money: You sell the business, and both of you divide the profits based on what the court or an agreement you make with your spouse says is fair.
- Co-Ownership: You and your ex continue to run the business together or share profits, usually with a written agreement that spells out the terms.
How a Lawyer Can Help You Minimize Business Disruption During Divorce
Divorce can pull your focus away from your business, but a good attorney can help you stay on track. For example, a lawyer can shield your records from becoming public by handling sensitive financial documents properly. They can also facilitate smart negotiations so you can avoid drawn-out court battles that drain time and money. If your spouse helped with your business, your attorney can build a clear case about what role they played. Finally, they can help you protect your ownership by creating buyout offers or offering trades for other property.
Contact a Michigan Divorce Attorney Now
Rodnick, Piraino & Ingber, PLLC, works with business owners across Michigan who need clear answers and solid support during divorce. When you come to us for help, our team will take the time to understand your goals, review your situation, and help you protect what you’ve built. Contact us now to learn more in an initial consultation session.
