When Michigan business owners get a divorce, it may be necessary to determine what portion of the business the other spouse is entitled to claim. The first step in this process is to get the business appraised.
An accurate appraisal will take more than just the company’s books into account. It will also consider both tangible and intangible assets ranging from equipment belonging to the business to the company’s reputation. It is important to have someone perform the appraisal who is experienced enough to identify when a person is trying to make the business look as though it is worth significantly more or less. This could be done by altering the expense reports or hiding profits. Another consideration is that in a family business, there could be handshake deals with no official paperwork.
There are a number of elements that a judge may take into account when deciding what share of the business each person gets. This includes whether the business was started before or after the marriage and how much time, if any, each spouse spent working on the business. Usually, one person will take an asset in exchange for that share of the business. The company may have an agreement in place regarding what happens in these circumstances.
In a high-asset divorce, there may be other complexities in dividing other property as well. For example, there could be real estate in other states or complicated investments. There might be capital gains or other taxes on assets sold. Some pension plans and 401(k)s can also cause complications since a qualified domestic relations order is necessary to avoid penalties on withdrawals.