Navigating the divorce process is challenging for anyone. However, when you are a business owner in Michigan, the situation can become even more complicated. Asset division is an important step in the divorce process, and it can have far-reaching legal implications for your business. An experienced attorney from Lucido & Manzella, P.C., can provide crucial guidance during this difficult period. Call our office for case-specific legal advice.
In a Michigan divorce, a business interest is treated like any other asset. It is potentially subject to division between the spouses. Depending on the circumstances, the court could award your spouse part ownership of your business. This can have an impact on partners, investors, and clients.
To protect your business interests during a divorce, it is essential to take certain legal steps ahead of time. For example, it is crucial to establish whether the business was started or acquired before or during the marriage. If it was before, you may have a stronger case for claiming it as separate property.
Incorporating your business or setting it up as a limited liability company (LLC) certainly protects your personal assets from business creditors and liabilities. But does it protect your ownership stake during a divorce? Unfortunately, there is no definitive answer.
Even if you are a corporate shareholder or an LLC member, this does not conclusively protect your ownership stake. The court will consider several factors, such as the origin of the funds used to start the company or acquire your interest, whether your personal property is collateral for business loans, and whether you paid yourself a regular salary.
If your spouse has been involved in your business, the court might conclude that they have earned an equity interest. This means they may be entitled to a portion of the business assets during the divorce.
To mitigate this risk, it is essential to maintain clear, accurate records. Document any money taken from your spouse or household accounts as loans to the business and pay your spouse the market rate for any work as an employee or independent contractor.
For businesses started prior to marriage, executing a prenuptial agreement can solidify your case for separate ownership. As part of that agreement, you can stipulate that your business should be treated as separate property in the event of a divorce. If you do not have a prenup, it may still be possible to execute a postnuptial agreement under certain circumstances.
Divorce can be complex when a couple owns a business together. The process can impact not only their personal lives but also the future of their business. Having a prenuptial agreement and seeking advice from experienced attorneys at Lucido & Manzella, P.C., can help navigate the next steps efficiently.
With over 25 years of experience, our team of legal professionals is dedicated to protecting your interests at every stage of the legal proceedings. We provide tenacious legal representation and are prepared to fight for your rights. Contact us today to discuss your situation and learn how we can assist you.
We offer a free initial consultation so you will get an opportunity to meet us, and we will have an opportunity to learn more about your legal issue.
Mr. Manzella represents businessman William Weber, who admitted to falsifying an invoice at ex-Macomb prosecutor Eric Smith’s request. He pleaded guilty to misdemeanor charges of conspiracy to commit a legal act in an illegal manner, with felony offenses dismissed during the sentencing.
L’Tonya Marie Payne, a 51-year-old black woman, is facing misdemeanor assault charges following an altercation. The complaining witness, who is white, stated the police would not believe Ms. Payne due to her skin color. Attorney Vince Manzella is working alongside Ms. Payne to fight these allegations, as she was arrested simply on the basis of the witness’s word.
Joseph Wolf, former director of the Detroit Stars, was sentenced to two years of supervised probation. Wolf pleaded guilty to embezzling funds from the nonprofit youth baseball league. Typically, the felony count can result in up to 10 years in prison, a fine of $15,000, and other charges, but Lucido & Manzella, P.C. was able to help the client receive a reduced sentence.
Charles Frontera, a former Roseville city councilman, was sentenced to a year of probation after a misdemeanor charge was dismissed at sentencing. During a pretrial conference, Mr. Frontera pleaded guilty to substance possession, and in doing so, Attorney Manzella was able to protect the client from severe charges.