The divorce process can be challenging to get through when complex assets are involved — such as a family or privately owned business. For many couples in Michigan, their businesses may be their biggest assets and subject to property division under divorce law. Before any big decisions can be made on how to handle a shared or privately owned business, there are a few questions that need to be answered first.
Question number one: What is the business worth? There are three ways to determine a business’ value: looking at financial records, reviewing the market and looking at appreciation over the course of the marriage. Valuation can take time, particularly if one spouse was not involved in business operations.
Question number two: Will taking a share of the business affect alimony? It may. There are some spouses who may wish to receive a share of the business value and alimony. This, however, is often referred to as double dipping and may not be allowed. One may have to choose between one or the other.
Finally, question number three: How can one uncover hidden assets? In order to keep more property for themselves, some spouses will try to hide business assets, downplaying company value and their own personal income level. Hidden assets can be uncovered with a little detective work. Forensic accountants and legal counsel can help with this.
At the end of the day, when it comes to a privately owned or shared business, there are a number of ways to handle its division during the property distribution phase of divorce. It all depends on what each party wants to get out of it in the end. A Michigan divorce law attorney can review the details of one’s case and help one achieve the best settlement terms possible.
Source: wealthmanagement.com, “Three Pressing Issues For Business Owners Going Through a Divorce“, Mark S. Gottlieb, Jan. 30, 2018
