Can a Professional Practice be Divided in Divorce?

Can a Professional Practice be Divided in Divorce?

Divorce is complicated—especially so for professionals who own their own practice. This raises an important question: Can a professional practice be split in a divorce in Michigan? The short answer is, “it depends on what you mean.” Michigan law largely prevents courts from splitting a professional practice in half, but a professional practice may be deemed a marital asset that is subject to equitable distribution. Our Michigan divorce lawyers highlight the most important things to understand about the division of a professional practice in a divorce. 

Background: Michigan is an Equitable Distribution State

Under Michigan law (MCL § 552.401), a divorcing couple’s marital property is split in an “equitable” manner. In effect, this means that the couple’s marital assets are subject to a fair distribution. It could be a 50/50 split of the marital property. However, that is not guaranteed by state law. In disputed divorce cases, Michigan courts divide property fairly. A business may be subject to equitable distribution. 

Background: Michigan Law Restricts Who Can Own a Professional Practice

Professional practices can be more complicated than many other types of business interests. The central reason for this is that Michigan state law restricts ownership of the professional practice. In general, only a person licensed to practice in a particular profession can be an “owner” of a professional practice. 

For this reason, courts generally cannot literally split a professional practice in a divorce in Michigan. With some exceptions, the spouse is likely not going to be a licensed professional in a field. As such, they could not own that professional practice. However, that does not mean that a professional practice is not a marital asset. It absolutely can be a marital asset. 

You Must Determine if a Professional Practice is a Marital Asset or a Separate Asset

When going through a divorce in Michigan, parties will need to determine if a professional practice is a marital asset or a separate asset. Regardless, it likely cannot be directly split by a court—meaning the spouse will not become an owner of the practice. However, if a professional practice is a marital asset, it will be a major factor in property division. Most often, the non-practicing spouse will be entitled to a greater share of the other marital property to account for the value of the professional practice. 

Contact Our Michigan Divorce Attorney for Immediate Help

At Iafrate & Salassa, P.C., our Michigan divorce lawyer has the skills and professional expertise to help you handle a professional practice in divorce. Give us a call now or send us a message to set up a private case evaluation. From our Clinton Township law office, we provide divorce representation in Macomb County and throughout Southeastern Michigan.