Divorce can be difficult, especially when the parties involved share a business. There are a few options to consider when dividing a business that can make the process easier.
How do I know if the business I own with my spouse is a martial asset or separate property?
Generally, if the business was owned by one of the spouses before the marriage it is considered separate property. However, this can be complicated depending on the circumstances of the divorce. An experienced family law attorney can help review an individual case to help assess how a court may treat a marital business during the divorce process.
How do I know how much the business is worth?
Sometimes spouses agree on the value of the business, however often there is a disagreement about how much the business is worth. Before the business can be divided in divorce proceedings, its fair market value must be assessed.
It may be necessary to work with an Accredited Senior Appraiser, a Certified Business Appraiser or a Certified Public Accountant with an Accredited in Business Valuation credential. These professionals are trained to provide fair market value assessments.
What options do spouses have to divide the business?
The parties can decide to have one spouse purchase the other spouse’s interest in the business, the parties can sell the business and divide the proceeds or they can agree to remain co-owners. Remaining co-owners is sometimes the most complicated of the three options unless the spouses can maintain a professional working relationship after the divorce.
Couples who own businesses in Michigan will also need to consider business tax requirements, business debt obligations and whether any other business owners may need to be involved in the property division process.