If you’re navigating this complex process, a divorce lawyer in Maryland can be your guide.
Understanding Marital vs. Non-Marital Property in Maryland
When a couple divorces in Maryland, their assets are classified into two categories: marital or non-marital property. This distinction is crucial in determining whether the value of your business is subject to division.
Marital property generally includes all assets acquired during the marriage, regardless of title. Non-marital property includes assets that were acquired before the marriage, obtained through inheritance or gift, excluded by a valid agreement, or that are directly traceable to any of these sources.
A business owned before the marriage, or received as a gift or inheritance, may remain that spouse’s separate, non-marital property. However, any increase in its value during the marriage may be subject to division.
Conversely, a business established during the marriage is typically deemed to be marital property. In this scenario, both spouses may have a claim to the business’s value.
Factors the Court Considers
In determining whether the value of a business is subject to division during a divorce, some factors to consider include:
- The contribution of each spouse: Did the non-owning spouse contribute to the growth of the business? For instance, did a spouse work in the business or provide other contributions to growing the business?.
- When the business was started: If the business was created before the marriage and remained separate from marital funds, it may be considered non-marital property. However, if marital funds were used to maintain or grow the business, it could complicate the division.
- The value of the business: A business valuation is often required to assess the worth of the business at the time of divorce.
These factors highlight why it’s crucial to seek help from a top-rated divorce lawyer in Maryland. With an experienced attorney, you can ensure that the appropriate analysis is conducted to protect your business interests.
Can I Keep My Business?
In the event the value of your business is subject to division, some ways in which spouses can address a business during settlement negotiations are: :
- Buyout: The most common solution for business owners is to buy out their spouse’s share of the marital interest in the business. The spouse can also account for the value of a business in balancing the division of other marital assets, such as real estate or retirement funds.
- Co-Ownership: In some cases, both spouses have an interest in the same business. If this is the case, spouses can agree that they will both retain their ownership interests in the business after the divorce. While this is generally undesirable, some couples who are amicable or have managed the business together may choose to continue as co-owners.
Steps to Protect Your Business in a Divorce
Being proactive can make a significant difference in keeping your business secureduring a divorce. Here are a few ways you can protect your business interests:
- Prenuptial or Postnuptial Agreements: If you’re not already facing divorce, consider a prenuptial agreement (before marriage) or a postnuptial agreement (after marriage). These legal agreements can clearly define how a business will be treated in the event of a divorce.
- Maintain Clear Financial Records: Ensure that your business accounts are kept separate from your personal and marital finances. This can help demonstrate that the business is non-marital property in the event of a divorce.
- Avoid Spousal Involvement: If your spouse works for or contributes to the business, this could complicate the division process in the event of a divorce. Avoiding his/her involvement can help protect the business as your separate non-marital property.
- Work with a Maryland Divorce Attorney: A skilled Maryland divorce attorney is critical when navigating these complex legal waters. They can help you gather the necessary documentation and advocate for you during negotiations and court proceedings in the event of a divorce.
Contact Us Today for Help and Information
Protecting your business in a Maryland divorce requires careful planning and the support of a knowledgeable family law attorney in Maryland.
Whether your business is considered marital property depends on factors like the date of its founding, the contributions made by both spouses, and the use of marital funds.
For those concerned about how a business will be affected during a divorce, consulting with a divorce attorney near me is the best way to safeguard their interests. A Maryland family law firm like Brodsky Renehan Pearlstein & Bouquet can provide the guidance and legal strategy necessary to help business owners protect their interests.
If you’re facing a divorce and want to learn more about protecting your business interests, contact Brodsky Renehan Pearlstein & Bouquet, a top-rated divorce lawyer in Maryland today.
