You spent years building it. Early mornings, difficult clients, payroll that kept you up on Sunday nights. For most closely-held business owners in Macomb County, the business is not simply an asset. It is the asset. The thing everything else was built around.
When a marriage ends, that business becomes the most contested, most complicated, and most legally exposed piece of everything you own. And closely-held businesses, the S-corporations, LLCs, family partnerships, and privately owned companies with no public market for their shares, create a category of divorce problem that is fundamentally different from arguing over a house or a retirement account.
The threats are real. A valuation that overstates your business’s worth can force a buyout you cannot fund without gutting operations. A spousal support award built on top of a property division that already captured business value can make you pay for the same asset twice. A settlement structured without attention to what actually drives your business’s value can leave you with a functioning business on paper and a financial hole that takes years to climb out of.
At Boroja, Bernier & Associates, we represent business owners across Macomb County and Southeast Michigan in high-stakes divorce cases involving closely-held business interests. Here is what you need to understand before the process begins.
Why Closely-Held Businesses Create Unique Problems in Divorce
A publicly traded stock has a ticker price. A retirement account has a statement balance. A closely-held business has neither.
Because there is no market transaction to reference, your business must be valued through a formal appraisal process. That process becomes a battleground. Competing experts frequently reach valuations that differ by hundreds of thousands of dollars because they use different methodologies, different assumptions about future earnings, and different conclusions about what a hypothetical buyer would pay.
The classification question adds another layer. Michigan is an equitable distribution state, meaning courts divide marital property based on what is fair rather than splitting everything in half automatically. Under MCL 552.401, the circuit court has authority to award either spouse a portion of property owned by the other when the evidence shows that spouse contributed to the acquisition, improvement, or accumulation of the property. MCL 552.19 expands on this framework, authorizing the court to divide real and personal estate that came to either party by reason of the marriage. Together, these statutes shape how Michigan courts treat business interests in divorce.
A business started or grown during the marriage is generally marital property subject to division. Even a business you founded before the wedding is not automatically protected. If your spouse contributed to its acquisition, improvement, or growth, directly by working in the business or indirectly by managing the household, raising children, or supporting your career while you built it, the appreciation during the marriage can become divisible marital property.
The portion of your business that existed before the marriage and grew without any contribution from your spouse may qualify as separate property. But tracing that distinction requires documentation and expert analysis most business owners have not thought to prepare. By the time a divorce is filed, the window to organize that evidence is already closing.
Valuation costs in Michigan typically run $5,000 to $25,000 or more depending on business complexity. For high-revenue businesses or those with contested goodwill, costs can climb substantially higher. Given that valuation disputes can shift outcomes by six figures or more, the investment in getting this right is almost never a mistake.
The Double-Dipping Problem: Paying Twice for the Same Asset
Double-dipping is the single most dangerous financial trap for Macomb County business owners in divorce, and it is consistently underexplained until the damage is done.
Here is how it works: During property division, your business is valued and your spouse receives a share based on that value. When the business is valued using an income-based method, that value is derived from what the business earns. Then, when the court turns to spousal support under MCL 552.23, it looks at your income, which is generated by that same business. If support is calculated on income without accounting for the fact that the income-producing asset was already divided in property settlement, you are effectively paying for the same asset twice: once in the division and again through support payments funded by the earnings that drove the valuation.
Michigan courts address this issue but do not prohibit it outright. In Loutts v. Loutts, 298 Mich. App. 21 (2012), the Michigan Court of Appeals rejected a bright-line rule against double-dipping and instead held that trial courts must evaluate the issue on a case-by-case basis under MCL 552.23 to determine what is just and reasonable. Translation: the court will address double-dipping only if your attorney raises it, presents the right evidence, and frames the overlap clearly. Fail to raise it, and you will pay twice.
The practical consequence is significant. How your settlement is structured, specifically how business value is allocated in property division and how income is treated in the spousal support calculation, determines whether you emerge from this divorce financially functional or permanently impaired. This is not a detail to negotiate casually.
Preventing double-dipping is not something the court does for you. It requires proactive framing from your attorney early in the case, with expert testimony distinguishing between reasonable compensation and excess compensation, before a support number gets established without it.
Enterprise Goodwill vs. Personal Goodwill
Goodwill is where Macomb County business divorces become most expensive and most contested, and most business owners are unprepared for it.
Enterprise goodwill belongs to the business itself. It includes the company’s brand, established client base, systems, location, and transferable relationships. Enterprise goodwill is marital property and subject to division.
Personal goodwill belongs to you. It reflects your personal skills, professional reputation, and client relationships that exist because of who you are, not because of the business structure. Personal goodwill is generally not divisible in Michigan because it cannot be transferred to a buyer. It walks out the door with you.
The problem is that in closely-held businesses, especially professional practices, consulting firms, and service businesses, the line between enterprise and personal goodwill is genuinely contested. Your spouse’s attorney will argue that as much of the goodwill as possible is enterprise goodwill. Your attorney will argue the opposite. The outcome of that dispute can shift the divisible value of your business by hundreds of thousands of dollars, and it requires expert testimony from a qualified business appraiser familiar with Michigan divorce standards.
In our experience representing business owners across Macomb County, the goodwill allocation is where valuation battles are decided. The expert you hire, the methodology they use, and how clearly they can distinguish transferable business value from owner-specific value shapes the entire negotiation.
Protective Strategies: What Works and When
The most effective protection strategies are the ones in place before a divorce is filed.
A prenuptial or postnuptial agreement that specifically addresses business ownership is the strongest available tool. Under MCL 557.28, marital agreements addressing property rights, including business interests, are enforceable in Michigan when properly drafted, executed with full disclosure, and signed voluntarily without duress. A well-structured agreement can designate your business and its future appreciation as separate property, establish clear valuation methodologies if division ever becomes necessary, and prevent a contested goodwill fight by defining in advance how the business will be treated. Boroja, Bernier & Associates drafts prenuptial agreements for business owners starting at $2,500 to $4,500 per person for straightforward agreements, compared to contested property division costs that routinely reach $25,000 to $75,000 or more when a business is at stake.
A buy-sell agreement within your business structure adds another layer of protection. A properly drafted buy-sell can restrict the transfer of ownership interests without the approval of other shareholders or members, establish a predetermined valuation methodology, and make it significantly harder for a divorcing spouse to claim a direct ownership stake. Buy-sell agreements do not override equitable distribution, meaning a court can still assign value to your ownership interest, but they reduce the risk of a forced ownership transfer to someone who was never part of the business and provide a pricing framework courts frequently consider.
During the divorce itself, maintaining meticulous financial records and continuing normal operations are critical. Courts in Macomb County’s 16th Judicial Circuit scrutinize business finances closely during divorce proceedings. Unusual salary increases, unexplained loans, or atypical distributions create red flags that invite adverse inferences and complicate your position significantly.
Engaging a forensic accountant early, before formal discovery begins, gives your attorney a clear picture of the valuation landscape before the opposing side establishes their narrative. It also positions you to challenge your spouse’s expert’s methodology proactively rather than reacting to a number that is already in front of the court.
Frequently Asked Questions About Business Divorce in Macomb County
Not necessarily in its entirety. A business started before the marriage may be partially separate property, but appreciation during the marriage is often treated as marital if your spouse contributed to the business directly or indirectly. Under MCL 552.401, the court considers each spouse’s contribution to the acquisition, improvement, or accumulation of the property when classifying it. Tracing the separate versus marital components requires documentation and expert analysis, and the earlier you begin that work, the stronger your position.
Double-dipping occurs when your business value is counted in both property division and spousal support calculations, effectively making you pay for the same asset twice. The same income stream that drove your business’s valuation in property division then becomes the basis for a support obligation funded by those same earnings. In Loutts v. Loutts, 298 Mich. App. 21 (2012), the Michigan Court of Appeals held there is no bright-line rule against double-dipping; courts must evaluate the issue case by case under MCL 552.23. Business owners who fail to raise the issue and present evidence risk paying on the same dollars through both property division and support.
A court can award a portion of the business’s value to your spouse, but Michigan courts generally prefer awarding offsetting assets or structured buyout arrangements over ordering actual transfers of ownership. If sufficient other assets exist, a buyout funded by those assets is a more common outcome than a forced transfer of shares or membership interests. A well-drafted buy-sell agreement in your business structure further reduces the risk of a forced ownership transfer.
Goodwill is often the most contested component of a closely-held business valuation. Enterprise goodwill, which belongs to the business itself and is transferable to a buyer, is marital property. Personal goodwill, which reflects your individual reputation and client relationships, is generally not divisible. The allocation between the two can shift the divisible value of your business by hundreds of thousands of dollars and requires testimony from a qualified valuation expert.
A postnuptial agreement can still address business ownership and valuation methodology, though enforceability requires careful drafting and full disclosure. Beyond that, ensuring your buy-sell agreement is current and properly restricts ownership transfers, maintaining meticulous separation between personal and business finances, and documenting the separate property components of your business all strengthen your position if divorce becomes a reality. Call (586) 991-7611 to speak with a Boroja, Bernier & Associates attorney about your specific situation.
Consult a Michigan family law attorney before taking any financial steps. Actions that might seem protective, such as transferring business assets, restructuring ownership, or changing compensation arrangements, can be treated as dissipation or fraudulent transfer if they occur after the breakdown of the marriage is foreseeable. Understanding what you can and cannot do before making any moves is essential. Boroja, Bernier & Associates offers confidential consultations for business owners navigating this situation. Call (586) 991-7611 or schedule a consultation today.
What This Type of Case Actually Costs
When business valuation is contested in a Macomb County divorce, total costs routinely reach $25,000 to $75,000 or more for high-asset cases. Attorney fees typically run $300 to $500 per hour. Valuation experts, forensic accountants, and extended litigation drive the remainder. Cases involving multiple entities, disputed goodwill, and extended litigation can exceed that range.
The cost of protecting your position proactively, including a well-drafted prenuptial agreement, a properly structured buy-sell, and early forensic accounting engagement, is almost always a fraction of the cost of fighting a poorly structured settlement after the fact.
Speak With a Michigan Divorce Attorney
Boroja, Bernier & Associates represents business owners throughout Macomb County, Oakland County, Wayne County, and Southeast Michigan in business divorce cases. If your business is your most significant asset, it deserves the same level of preparation and legal precision that you applied when you built it.
To schedule a consultation with the Michigan divorce attorneys at Boroja, Bernier & Associates, call (586) 991-7611. Our offices are located in Shelby Township, Troy, Ann Arbor, and Lansing.
About the Author
This article was written by Joel Bernier, Esq., a partner at Boroja, Bernier & Associates PLLC, admitted to the State Bar of Michigan in 2010 (Bar No. P74226). Joel focuses his practice on divorce and family law for Michigan families.
