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Farmington Hills divorce attorney for family businesses and professional practicesEnding your marriage through divorce will involve multiple types of financial considerations. Determining how to divide your marital assets can often be a complex process, and this is especially true if you are a business owner. A family business or professional practice may be one of your most valuable assets, and it may also be your primary source of income. Ensuring that you can continue to own and operate your business will likely be one of your most important goals during your divorce, so you will want to make sure you understand how to approach this issue.

Is a Family Business Considered Marital Property?

Before determining how ownership of business assets will be handled, you will need to understand whether your business or practice is considered marital property. In general, if the business was founded during your marriage, it will be considered a marital asset, but if you owned the business before getting married, it will be considered separate property. However, even if your business is not a marital asset, you may need to address any increase in value of the business during your marriage. If your spouse contributed to the business, such as by helping manage operations or by investing marital funds in the company, you may be required to reimburse your spouse for these contributions.

Asset Division and Business Interests

If your business is a marital asset, it will need to be considered during the division of marital property. In some cases, spouses choose to sell a family business during their divorce and divide the profits earned. However, this may not be an option for you, so you may need to make other arrangements as you determine how to divide this and other marital assets.

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Oakland County divorce attorney asset division

When you get divorced, you and your spouse will need to divide your property and assets. During the property division process, you will need to identify all of your assets, determine their value, and reach a fair and equitable agreement for how these assets should be distributed between the two of you. Unfortunately, this process can become more difficult if one party tries to unfairly influence the results by hiding or concealing assets. If you suspect that your spouse has hidden assets from you, you will want to understand how you can uncover this activity and the steps you can take to ensure that your property is divided fairly and equitably.

Methods of Hiding Assets

There are a variety of ways that spouses may attempt to conceal assets that they do not want to divide with their spouse, including:

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Oakland County divorce attorney property division

The division of marital property is often one of the most important considerations in a Michigan divorce. For many divorcing spouses, one of the top questions is, “Who gets the house?” You and your spouse may be able to reach an agreement about what to do with your house. Mediation and collaborative law are two alternative resolution methods that have helped countless divorcing couples reach property division settlements. If you cannot reach an agreement, the decision regarding possession of the marital home will be left to the court.

Options for Dividing the Marital Home

You and your spouse have several options when it comes to the marital home. You may decide to sell the home and then divide the profits. If one spouse wishes to retain possession of the home, you may decide on a property division arrangement in which the spouse who gets the home “buys out” the other spouse. This is usually accomplished by one spouse retaining possession of the home and the other spouse retaining possession of the marital property of an approximately equal value.

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How Is the Dissipation of Assets Handled in a Michigan Divorce?The end of a marriage can be difficult on many levels. The breakdown of a relationship can affect more than just spouses. If a couple had children together, they will likely be devastated to see their family unit split apart. In addition, breaking up can cause financial hardship for one or both parties. Michigan, like many other states, is an “equitable distribution” state when it comes to dividing assets or property in a divorce. This means any marital property will be divided in a fair way, but not necessarily 50/50. In some cases, one spouse may have made secret purchases with marital assets. The legal term for this deception is “dissipation of assets,” and an experienced divorce attorney can help discover it. 

Uncovering Hidden Expenditures

Dissipation is defined as spending marital money, or using any marital asset, for something that benefits only one spouse, not the marriage as a whole. Since funds are leaving the marital estate, the combined value of the assets being divided in the divorce settlement will be lower. Examples of dissipation can be gambling, drug or alcohol abuse, money spent on an extramarital affair, or any extravagant purchases made by one spouse.

It may be challenging to prove the dissipation of assets, but that is where a skilled attorney, as well as a forensic accountant, can help. They know where to look and how to reveal dissipated assets. Carefully reviewing financial records and documentation is essential in providing evidence that one party was siphoning off money for him or herself. In certain situations, one spouse could be guilty of filtering money or expenses through a business that they own.

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Three Steps to Protect Your Finances During DivorceDivorce is stressful for a number of reasons, and adding financial struggles on top of everything can set people over the edge. Before couples begin the divorce process, they often expect things to be cordial and expedient. Things can quickly get ugly when the possibility of divorce becomes a reality. The division of marital properties and assets can bring out the worst in individuals with some spouses going so far as hiding assets or lying about their financial stability. Whether or not your spouse is involved in foul play, it is important to take additional measures to protect your finances during your divorce to avoid paying for it later.

Gather Your Records

Some divorcing spouses will take advantage of their joint financial accounts right before the divorce becomes official by buying expensive things or making large purchases, draining the account to keep the money away from their ex’s pockets. Obtaining documentation of the amount within all of your accounts before the divorce is a good way to protect your joint and individual accounts from these sort of actions. With the proper evidence, you can prove that your spouse’s spending habits have changed drastically throughout the divorce, jeopardizing your financial stability in the future.

Create Your Own Accounts

Many couples share all of their financial accounts, especially females or stay-at-home parents. While this connection may not seem problematic throughout your marriage, once divorce becomes a possibility, it can leave you reliant on your soon-to-be ex-spouse. One of the first actions that divorcing couples should take is to open their own bank account and get their own credit card. Not only will they begin building up their own credit, but they will also have sole control over the finances. Many divorcing couples will close their joint accounts at the beginning of the divorce process to avoid unfair spending or foul play.

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How Is Real Estate Property Divided in a Michigan Divorce?No one really enters into a marriage thinking they are going to get divorced. Sadly, many couples do end their legal unions for various reasons. In some cases, an extramarital affair or an addiction problem may have caused the relationship to sour. Once a couple decides to part ways, they will have to make many decisions, including how to divide their assets and property. The division of real estate properties can be one of the most contested aspects of a divorce. Spouses often argue over who gets to stay in the marital home or who can keep the lake house. Under Michigan law, a judge is required to distribute marital property fairly. This typically means that each spouse receives approximately half of everything. However, the property may be divided unequally if one party is considered to be more responsible for the marriage ending or if one party proves a significant need for more assets. 

Separate Versus Marital Property

If either spouse owns his or her own property prior to the marriage, it is classified as separate property. In addition, gifts or any type of inheritance received during the marriage are referred to as separate property. If a spouse owns separate property such as another home, jewelry, or artwork and it appreciates in value on its own, the increase in value is still separate.

The majority of assets or property that spouses accumulated throughout their marriage is marital property. Regardless of whose name is on a title or deed, it is still marital property unless it was given to or inherited by one spouse. Marital property means that it is owned by both spouses. Typical examples include houses, vehicles, furniture, artwork, retirement plans, pensions, bank accounts, CDs, or any other assets or investments earned or acquired during the marriage. 

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Farmington Hills divorce attorney property divisionThe wedding ring handed down from your husband’s grandmother. The antiques from your wife’s family that were inherited during your marriage. Expensive purses and jewelry given by a husband’s mother to his wife as Christmas gifts. These are all examples of items that have both sentimental and financial value which can become bones of contention during a divorce. How do Michigan courts typically divide such items?

Engagement Rings

Michigan courts have ruled that if a couple breaks off their engagement prior to the wedding ceremony, the giver (purchaser) gets the ring back. Fault is not a factor here; that is, it does not matter who broke off the engagement or if one person was more to blame than the other.

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Farmington Hills divorce lawyer, retirement account division, property division, retirement savings, divorce and financesMost Americans can expect to live for about 15 to 20 years after their retirement. But are we saving enough to live comfortably in retirement? Among families with income in the 50th percentile and above, over 80 percent at least have some type of retirement account, such as an IRA, 401(k), or defined-benefit pension plan. That is a good start, but most are not saving enough.

A recent survey found that just 40 percent of those aged 35-54 and just 50 percent of those age 55+ have over $100,000 in retirement savings. By most accounts, this is not nearly enough, even considering the addition of Social Security payments. According to a recent Harvard Business Review article, a median income worker can only expect their Social Security payments (after Medicare premiums) to equal 29 percent of pre-retirement income.

Hence, it is important to highlight the need to make sure retirement accounts are equitably divided in a divorce. It is all too easy to focus on pressing issues like child support and what happens to your house, and possibly miss out on what is due to you from a spouse’s employer-held 401(k) or pension plan.

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