How Do You Value a Business in a Michigan Divorce?
Divorce is a difficult and stressful time for any couple, and the amount of work that needs to be done to divide assets in a fair and just way only adds to the pressure each party is facing. Dividing property between spouses can be a complex and contentious process, and the outcome for each piece of property during the divorce proceedings can depend on a wide variety of factors.
When divorcing spouses own or run a business together, the separation of a business as an asset can be especially confusing. Before you begin the process of dividing the business, it’s important to determine exactly what type of property the business is in your specific case.
Business Division in Divorce: Determining Property
Before you can assess the value of your business, you will need to decide whether the business in question is understood as marital or separate property. In order to determine this, you and your spouse will need to provide information concerning:
- Whether or not the business was acquired or created during the marriage
- How you funded the business’s opening
- The specific ways in which each spouse contributed to starting and/or running the business
If your business was started or acquired by one of the parties before you got married, it doesn’t necessarily mean that the business can be categorized as separate property. If shared marital funds were used for the benefit of the business by one spouse, the other spouse may have the grounds to collect value from the business during the divorce.
How to Assess the Value of Your Business
Because a business is not a physically tangible piece of property like a car or home, determining its true value can be a challenge. Generally, divorcing couples that share a business will work with a series of professionals such as forensic accountants and real estate appraisers to determine value based upon profits, output, business expenses, and more.
Can I Determine the Value of My Business Without Legal Advice?
Like any division of significant property, dividing the value of a business between spouses can be not only complex but also emotionally taxing, depending on the nature of the couple’s relationship. With the rise of online property division templates and other free do-it-yourself divorce materials, many couples are opting out of legal counsel entirely during their divorce in order to save money.
There are a few reasons why opting for free online resources instead of an experienced lawyer is unadvisable. For one, an online template won’t have every detail of your specific situation in mind and could in fact deliver extremely skewed results based upon the parameters under which it was created. If even one detail is out of place, the entire agreement could become invalid. For another, divorcing spouses can sometimes fail to disclose true income, important assets, inheritances, and other crucial details that make a big difference in the division of property during a divorce. A lawyer can work closely with each party to make sure that no vital information is left undisclosed and your business’s value is properly divided according to the terms of your divorce.
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