It can take years to build brand recognition and loyalty. Yet, all it takes is a divorce and a vindictive ex-spouse to destroy your company. This is why it’s important to hire one of our divorce lawyers in Grand Rapids, MI as soon as possible.
Contact us today with any additional questions or concerns you may have. The sooner you call, the sooner we can set up a consultation and discuss ways to divorce-proof your business. Our divorce attorneys have plenty of experience helping business owners just like you and are ready to help.
How do I protect my business from divorce?
Our divorce lawyers recommend keeping your company and household finances separate. We also recommend easing your spouse out of the company so they can’t claim as much involvement. If you plan on, call our divorce attorneys as soon as possible and consider our tips below.
Fire Your Spouse
It may sound brutal, but firing your spouse reduces their claim on your company. If you have time before you know you’ll be filing for divorce, ease them out of the business as soon as possible. The more involved your spouse is in the business, the more likely their attorney will argue their client deserves a cut of the profits. A judge might agree.
Keep Family and Business Finances Separate
Keep your family and company finances separate. For example, don’t dip into the household account you share with your spouse to invest in new company equipment. Otherwise, it’ll be easy for your ex-spouse to argue that they have a claim to your business. Our divorce lawyers can help you prove your business didn’t touch shared family accounts.
Give Yourself a Fair Salary
Your ex-spouse may be entitled to the company’s assets if you withheld money from your household to grow the business. You can easily avoid this situation by paying yourself a good salary.
Get an Appraisal from a Neutral Outside Party
Don’t agree to an appraisal until it’s been reviewed by a neutral outside party. If your company is marital property, its appraised value will affect how much you have to pay your ex-spouse for their share.
Give Up Other Assets
In the state of Michigan, marital assets have to be valued and divided properly. If you don’t want to relinquish control of your business, we may recommend giving up other assets in its place. For example, you may choose to give up the house in exchange for keeping 100% ownership of the business.
Is a business considered marital property?
In the state of Michigan, marital assets must be valued and properly divided during a divorce. When you started your business will determine whether it’s considered a marital asset.
Companies Started Before Marriage
Companies you started before getting married have a better chance of remaining untouched in a divorce. However, the court may decide otherwise if they see your ex-spouse greatly contributed to the company during the marriage. The court may also see the company’s increased value over the course of your marriage as a marital asset.
Companies Started During Marriage
Companies you started during the marriage are considered marital assets. The court will award the company to the person who plays the most active role. If you’re awarded the company, you’d then have to pay 50% of the company’s net value to your ex-spouse.
Our divorce attorneys can help you determine whether you’d like to make payments over several years or give up a different asset in lieu of payment. For example, you may give your ex-spouse the retirement accounts in exchange for 100% control of the business.
Did you inherit a company? An inherited company may need to be divided during a divorce depending on the number of years you were married, the donor’s wishes, and whether the company commingled with other marital assets.
The longer you’ve been married, the more likely your company has grown in value or commingled with other marital assets. In these situations, the judge would determine your inherited company is a marital asset that needs to be properly divided.
Can I be forced to sell my business during a divorce?
It’s unlikely that the court would force you to sell your company because it would cut off future income needed to pay child support and alimony. However, this doesn’t mean you should let your guard down. If your company is considered a marital asset, it’ll have to be properly divided between you and your ex-spouse.
If you liked this post, you might want to take a look at 3 mistakes to avoid during your divorce.
We also offer services such as:
- Paternity Attorney Services
- Parenting Time Attorney Services
- Child Support Attorney Services
- Custody Attorney Services
- Divorce Attorney Services
Our divorce attorneys in Grand Rapids, MI are ready to help you protect your business during the separation and divorce process. To request a free consultation with one of our divorce lawyers, call John Engman & Associates P.C. at (616) 454-5222.