Who Gets What? Understanding Property and Business Division in a Michigan Divorce

By: Paul C. Fessler

When a marriage involves few shared assets and each spouse maintains separate finances, dividing property during a divorce is often relatively simple. As wealth accumulates, however—when real estate, investments, or business interests are involved—property division can become far more complex and contentious. If spouses are unable to agree on how to divide their assets, the court will ultimately resolve the dispute.

Michigan law requires courts handling divorce cases to divide marital property equitably. While an equal split is frequently the outcome, equity doesn’t always mean equality. Certain circumstances—such as unequal ownership interests in a jointly owned business—may justify a distribution that’s not fifty-fifty.

How Courts Divide Marital Property

When spouses disagree over the division of marital assets, the circuit court evaluates evidence, hears testimony, and issues findings that determine how property will be allocated. The court considers multiple factors, including:

• The length of the marriage
• Each spouse’s contribution to the marital estate
• The ages and health of the parties
• Each spouse’s life situation and financial needs
• The parties’ earning capacities
• The parties’ conduct during the marriage
• Broad principles of fairness and equity

Courts may also take into account whether one spouse gave up educational or career opportunities to support the household or the other spouse’s professional pursuits. Fault-related issues—such as adultery or abuse—and the needs of children or other third parties may also influence the final outcome. No two cases are identical, and courts tailor decisions to the specific facts presented.

Businesses as Marital Assets

When spouses jointly own a business, that interest is generally considered marital property. Courts are reluctant to order divorced spouses to continue operating a business together, recognizing that such arrangements are rarely practical or beneficial.

Before a business can be divided, it must be accurately valued. If one spouse owned the business prior to the marriage, the court may treat only the appreciation in value during the marriage as marital property. Unequal ownership interests are also significant, as majority ownership often carries greater control and economic value.

In addition to ownership percentages, courts evaluate each spouse’s role in the business. Direct contributions may include management, labor, or financial investment, while indirect contributions can include household management or other support that allowed the business to succeed. Depending on the circumstances, a court may favor the spouse who invested more capital, the spouse who contributed more labor, or strike a balance between the two.

Courts also consider whether dividing the business in a particular way would undermine its viability. If an equal division would prevent either spouse from continuing operations, the court may choose a more practical and equitable solution. Expert valuations and detailed financial records are often essential in reaching a fair result.

Separate Business Interests

Some assets may qualify as separate property rather than marital property. Generally, this applies to property acquired before the marriage that was not mixed with marital assets and was not enhanced through the efforts of the other spouse during the marriage.

For instance, if each spouse owned shares in the same publicly traded company prior to marriage and those shares were left untouched and uncommingled throughout the marriage, the court may classify them as separate property.

The courts will retain the authority to award a portion of separate property if fairness requires it—such as when one spouse demonstrates financial need or shows that they contributed, directly or indirectly, to the asset’s growth. Indirect contributions may include caring for children or managing the household while the other spouse focused on the business.

Because dividing business interests in a divorce is often legally and financially complex, both spouses benefit from experienced legal guidance. An Ann Arbor divorce attorney can help identify, value, and protect business and marital assets—whether the parties are negotiating a settlement or presenting their case to the court.

If you’re considering divorce and business or significant marital property is involved, consulting with a knowledgeable Ann Arbor divorce attorney can help ensure your interests are protected and that any division of assets is handled fairly and strategically.