Maryland Asset Division and Marital Businesses

Businesses established and developed during the marriage are generally classified as marital property and frequently represent the most substantial assets within the union. This classification holds for a range of enterprises, from sole proprietorships to partnerships, that were either initiated or significantly developed during the marital period. Common examples of such marital businesses encompass family-owned restaurants, professional practices like dental offices or law firms, retail stores, and technology startups. These entities are often critical to the financial discourse of divorce proceedings, as their valuation and division can significantly impact the economic outcomes for both parties. Here is a list of typical marital businesses: 

• Dental practices
• Domestic Business Organizations 
• Foreign Business Organizations 
• Franchises 
• Insurance Agencies 
• IT Consultancies
• Limited Liability Corporations 
• Limited Partnerships 
• Liquor Licenses 
• Liquor Stores 
• Marinas
• Medical practices
• Partnerships
• Real Estate Investment Companies 
• Tax preparation Agencies
• Tool and Dye/Fabrication 

The Valuation of Marital Property Under Maryland Law

Business valuation is an intricate process. There are factors beyond revenues, gross sales, revenue trends, location, profits, and losses. When valuing businesses, one of the thorniest issues is determining the value of the "Professional Goodwill" that characterizes a company. Professional Goodwill is acquired over time and refers to the reputation of a business, repeat customers, the benefit that a business has as the result of retaining a skilled workforce (that does not need to be trained again), the cumulative effect of advertising to give a company its name in the community. Trial courts are often reversed by estimating and following their methodologies. If matters where a business of substantial value is subject to equitable distribution, there is no substitute for expert testimony from duly qualified forensic accountants and appraisers. 

What Impact Can a Divorce Have on Your Baltimore County Business?

Under Maryland law, all property obtained during the marriage is considered marital property. So, what does that mean exactly? It means your soon-to-be ex-spouse will, in all probability, be able to claim a portion of your interest in your business. There are exceptions to the rule, however, and the scope of your spouse's interest will depend significantly on several factors. Such factors include, but are not limited to:

• Restrictions on your interest that may be imposed by documents governing the business
• Non-marital or premarital claims you might have to your business interest
• The value attached to your interest in the business or in the company itself

It is important for divorcing individuals who own businesses to keep in mind that if their business interests were obtained before the marriage, particularly by gift or inheritance, they might be able to defend against their spouse's claim. Still, if there was an increase in the owner's interest in the business during the marriage, the spouse may have a claim if the increase occurred because of the owner's time and effort put into the business.

Protect Yourself By Retaining a Top Towson Divorce Lawyer & Family Law Firm.

Contrary to what you might think, there are ways in which business owners can protect themselves from the harsh realities associated with divorce. One thing owners can do is take inventory and understand precisely what is at stake. Then, whether via a judge's ruling or an agreement, you and your soon-to-be ex will reach a monetary determination concerning your spouse's claim to business interest.

That is why you need to clearly understand that value as soon as possible once you know that divorce is inevitable. Business interest values can vary based on your size and type of business, your experience and skill level, and data related to similar or comparable companies that have been sold.

It is also essential for business owners to ensure their books are in order. This is especially important in the case of divorcing business owners because their business and personal financials will be closely reviewed.

That said, business owners in the mid proceedings are encouraged to work with knowledgeable lawyers who can adequately review and advise how their business records may be construed.

Having a reliable and trustworthy Towson Family Lawyer. by your side as you try to protect your interest can be invaluable in the long run. However, the claim that your spouse can make against your business interest may be more extraordinary (or lower) than you expect. That is why it is wise to gain some perspective on the possibilities during the early stages of the divorce.

Call 410-321-4994 For a Free Consultation With Towson Divorce Lawyer Amar S. Weisman.

Please Call (410) 321-4994 to schedule a Free Consultation. The purpose of the consultation is to decide whether you want to hire Amar S. Weisman. To obtain legal services, you must pay a retainer, see Policy on Fees/Costs. The law firm is next to The Circuit Court for Baltimore County at 1018 Dulaney Valley Road, Towson, MD 21204. We represent clients throughout the Baltimore area, including Aberdeen. Abingdon, Bel Air, Bowleys Quarters, Catonsville, Cockeysville, Edgewood, Essex, Lutherville, Owings Mills, Parkville, Perry Hall, Rosedale, Sparrows Point, Timonium, Towson, Westminster, and White Marsh.