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How does property division affect business owners in Michigan?

Michigan is an equitable division state, which means that the marital assets are divided in a way that the judge thinks is fair. If you own a company and you are going through a divorce, you may be concerned about how this will affect your ability to stay in business. The Huffington Post explains that the value of the company must first be determined before an equitable division can take place.

One method of determining the value of your business is to list it as property. It is considered marital property unless you acquired it before you were married and no resources from the marriage were contributed to it for the duration of the union. The value may be set based on fair market value, where it is treated as an item that can be sold at a set purchase price. In this case, you may be able to come to an agreement where you buy out your spouse’s interests in the company so you can become the sole owner.

Another way to come to an amount is to gauge its value as a source of revenue to you as the owner. This may include the following considerations:

  •          Rate of return on similar businesses
  •          The risks involved in owning this type of business
  •          Your company’s historical earnings

If you describe the business as income rather than property, the amount of profit you bring home each month could be subject to alimony. When determining how much spousal maintenance to award, the judge may consider how it will affect the stability of your business and your ability to support yourself. Other factors may be considered, as well. While this information can help you understand the process, it is not intended to provide legal advice.

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Lorrie J. Zahodnic

"I will hold you up until you can stand on your own two feet."

Lorrie J. Zahodnic, P.C. has provided skilled and compassionate legal guidance to Michiganders in family law matters for over 20 years.

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