If you or your spouse owns a business and you are getting divorced in Michigan, figuring out how much that business is worth becomes important. Getting this value wrong could mean losing out on thousands or even hundreds of thousands of dollars from your share of your assets.

Michigan courts have made it clear: when a business is part of a divorce, you must figure out its value. But determining what a business is truly worth is not as simple as checking a bank account balance. It is also the law that it is not the court’s job to search for the evidence – it’s yours, if you want the value of the business considered, even if you do not own the business.

Why the Right Expert Matters

When the wrong person values a business, the numbers can be way off. In some Michigan divorce cases, two different experts concluded values that were hundreds of thousands of dollars apart! When this happens, judges sometimes:

1. Pick the value somewhere in the middle

2. Reject both experts’ opinions completely

3. Appoint their own expert to start over

None of these outcomes gives you control over your financial future.

Different Ways to Value a Business

There is not just one way to figure out what a business is worth. Experts might look at:

1. How much money will the business likely make in the future

2. What similar businesses have sold for recently

3. What the business owns (like equipment, inventory, or property)

Michigan courts have said that no single method works for every business. The right approach depends on your specific situation. Without a good expert, you might argue for or be persuaded to agree to the less appropriate or wrong method and hurt your own case.

More Than Just Numbers

We routinely collaborate with skilled business valuation experts who do more than just math. Our experts can:

1. Explain complex business values in ways judges understand

2. Help you see options for dividing assets you might not have considered

3. Show how different settlement options affect your taxes

4. Make sure business income is not counted twice (once as property and again for support payments) or explain why a double dip is not applicable in your situation

Even the date used for valuing the business can significantly affect value. A business might be worth much more or less depending on if you value it at the beginning of your divorce or at the end.

Worth the Investment

Hiring a qualified business valuation expert might seem expensive at first, but it’s actually a smart investment as is the investment in the family law professional you select. These professionals can find:

1. Income that is not being reported

2. Business expenses that are actually personal

3. What a fair salary for the business owner should be

4. The value of a business’s reputation and customer relationships

5. Fair treatment of business debt.