High asset divorces are sometimes much more complicated than divorces with little income and few assets. For business owners, divorce can be an especially complex legal undertaking, as their business may be up for division. Because Michigan is both an equitable distribution state, a business created during a marriage or the appreciation of a premarital business may be considered to be marital property, and is thereby subject to division in a manner that is just and equitable if parties decide to divorce.
Valuation of a Business During a Divorce
Because all marital property of both spouses must be considered in order to come to a property division arrangement that is fair and equitable, a business – whether it is held separately or jointly – most likely will undergo a valuation. A business valuation is simply the process of determining the economic value of the business. Business valuation are usually performed by a third-party appraisal professional.
Fair and Equitable Division of a Business During Divorce
There are a few different approaches that a divorcing couple can take when it comes to a business:
- One party may buy the other party out of the business, providing the purchaser with sole ownership.
- Sell and split. The couple may choose to sell the business entirely and split the profits equitably amongst each other.
- Co-ownership. If the couple has an amicable relationship, they may continue to remain in business with one another, and split the business’s profits per contingencies outlined in an operating agreement.
- Trade off. Spouses may come to an agreement about a fair trade. For example, one spouse gets to keep the car and the house while the other spouse gets to keep the business.
Guiding You Through High Asset Divorce and Business Valuation
If you own a business, you already know how sensitive business matters are, and likely have an emotional, as well as a financial, attachment to your company. Getting a divorce can complicate your business’s operations, and may leave you wondering who will get what.
At the Law Offices of Michael A. Robbins, our committed high asset divorce team understands that resolving your divorce efficiently while protecting your financial interests is paramount. We will work hard on your behalf, and partner with financial experts, to find a resolution that satisfies all parties and that is aligned with Michigan law.
To learn more about how we can help you understand property division laws and the financial implications you may face as a business owner, contact our law offices today. An initial consultation with our law firm is always free. Call us now at 248-646-7980.