Business Assets in Divorce
If you, your spouse, or both of you jointly own a successful business, it is very likely the most valuable asset in your marriage. If you face a divorce soon, the dissolution of your marriage could impact that business in various ways. Arn Family Law can help you protect your rights as it relates to business interests before and during a divorce, so contact us today for a phone consultation and find out how our Annapolis divorce lawyers can assist you.
Why Work With Arn Family Law?
When you need a family law attorney it is crucial to find one with the experience and resources to handle the complexities of your case.
- At Arn Family Law, helping our clients with their family law issues is more than just a profession, it is our passion.
- Your Columbia family law attorneys will carefully explain all the legal implications of your situation so you can make informed decisions about the direction of your case.
- We can coordinate with expert witnesses to support your position in the family law court and strive to maximize our efficiency during all billable time.
Divorces involving businesses assets are incredibly complex and Arn Family Law has the experience necessary to navigate such a case with confidence. These cases not only involve family law with the divorce angle but also often touch on contract law and business law, especially if the divorcing couple developed a business contract with a clause about their marriage.
Separate vs. Marital Property
A threshold question regarding a business interest in a marriage is whether or not that business will be considered marital or separate property. The question of whether the business is marital or separate is not determined solely by how the business is titled. In Maryland, marital property is all property acquired by either spouse, no matter how titled, from the date of marriage to the date of divorce.
Under Maryland law, the property can be acquired in various ways during a marriage. It can be purchased in whole or in part, such as a business where debt incurred to acquire the business is paid down via monthly payments. As well, a spouse who is not a joint owner of a business that their spouse owned at the time of the marriage may acquire a marital interest in that business by working for that business, contributing marital funds to the business, or by their spouse working for the business which in turn leads to an increase in value of the business over time. Understanding your rights and liabilities as it relates to a business asset in divorce requires the legal expertise that you will find at Arn Family Law.
Alternatives to Splitting Proceeds
If the business asset is jointly owned and neither spouse is willing to let go of the business for any reason and the two cannot agree to continue running the business as partners, the only available option to ensure an equitable division of the business is to sell the business and divide the proceeds between the spouses. However, the couple can avoid this if one is willing to relinquish his or her ownership rights. Typically, the spouse keeping the jointly owned business must offer other marital property or assets in exchange. For example, the spouse keeping the business may offer the marital home or other assets of equivalent value in exchange for the other spouse’s ownership rights.
Alternatively, one spouse may simply buy out the other spouse’s share using separate funds, but the selling spouse will likely demand an expert financial examination of the business to determine a fair amount. An investigation will assess the overall value of the business, future cost/benefit analyses, and other economic factors to determine the business’s net value.