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Does my spouse get part of my business started before the marriage?

On Behalf of | May 19, 2022 | Divorce

Dividing marital assets is typically one of the challenging parts of a divorce. Michigan laws call for couples to divide their assets fairly and equitably, which is not the same as 50-50. It means that couples split assets amassed during the marriage in a way that reflects each spouse’s earning power, the length of the marriage, the cause of the divorce, and other relevant factors.

However, it gets more complicated when assets brought into the marriage become commingled, which can happen if both spouses contribute to a mortgage of a home bought by one of them. Unless there is a valid prenuptial or postnuptial agreement in place, dividing an asset like a business can also get split fairly and equitably even if one spouse brought it into the marriage. This happens for many different reasons, including:

  • The owner commingled marital and separate funds in running the business.
  • The owner did not draw a standard salary from the business, which means the marriage supported them.
  • The non-owner contributed to the business’s success during the marriage.
  • The non-owner handled all home-related finances and activities, leaving the owner to focus on building the business.
  • The privately-held business became incorporated during the marriage.

Agreeing on the value

Assigning a value to the business is often an essential part of dividing assets. Depending on the circumstances of the split, one or both parties will assign a value. If there is a significant disagreement on the amount, they can separately or jointly hire a business valuation expert to provide additional insight. If both sides hire one, they will likely get different answers. The final say may be left to the judge if litigation is involved.

Protect your rightful assets

Understanding the value of a business and other investments can help spouses protect what is rightfully theirs. Using experts and attorneys can help better ensure that the spouses get a fair and equitable split of the assets.