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Will you lose part of your professional practice in a divorce?

Will you lose part of your professional practice in a divorce?

You will probably have to make some financial sacrifices as you move forward with a divorce in Michigan. As a successful, educated professional, you have likely spent a significant amount of your adult life building your professional practice and establishing the necessary criteria to work as a physician, dentist, accountant or other licensed professional.

Now that divorce looms in your immediate future, you may find yourself worrying about whether your spouse potentially has a claim to partial ownership of your business or professional practice. Will the courts possibly give your spouse part of your business in a divorce?

Whether your practice gets divided depends on when you started it

You might think that if you are the only owner of the business or professional practice that the absence of your spouse’s name on business ownership documents would be enough to preclude them from laying claim to it in a divorce.

However, under the equitable division standard used by the Michigan family courts in divorces, the names on ownership paperwork will matter substantially less than when you started the company and what resources you used to do so. If you had already married your spouse by the time you started your company or you used marital income to support the business, then the chances are good that they have at least a partial claim to the value of the business or the marital assets that you used for it.

Prenuptial and postnuptial agreements could potentially protect your business from claims by your ex, as could direct negations for an uncontested divorce. Those with substantial personal assets at risk in a divorce, like professionals with their own practices, will often benefit from consulting with an attorney before they move forward with the divorce.

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