Most couples who are going through a divorce in the state of Maryland will need to work through and decide how to divide any assets and property the couple has purchased during their marriage. The goal is that these assets are divided in a fair and equitable way. For example, if the couple has approximately $100,000 equity in the family home and another $100,000 in stocks, one spouse may get the house and the other spouse the stocks. But if the couple owns a business, the division of this asset is often more complex than dividing other assets. If you are going through a divorce and you and your spouse own a business, call Peerless Law to speak with a divorce lawyer Frederick, MD clients trust.
How the Process Works
One of the factors that can make dividing a business difficult is that the value of the business may fluctuate from one week to the next, depending on the nature of the business. There are other factors that the courts will look at when determining how the business should be divided.
The first factor the court will determine is whether or not the business is considered marital property. If one spouse started the business before the marriage, and all of the profits and any assets the business owns were kept entirely separate from other marital assets, the courts will probably deem the business as separate property and not part of the marital estate. In other words, the business is not an asset that needs to be distributed with other marital assets per the laws of the state of Maryland.
However, if the business was started during the couple’s marriage and assets from the business were in joint accounts or if any profits made from the business were used to pay marital debts and expenses, then the courts may deem the business as part of the marital estate and distribute per the laws of the state.
A Fredrick, MD divorce lawyer can evaluate your information and determine if the business owned by you and/or your spouse should be addressed in your divorce.
Determining the Value
If the business is determined to be part of the marital estate, the next step will be to determine its value. If both spouses agree to the value and the court agrees the amount is fair and reasonable, then there should not be any further action necessary. Unfortunately, it is not often that easy and each party usually disagrees on what the value of the business is. That means the court will have the final decision.
There are a few ways this may occur. The court may order a professional appraiser determine what the fair market value of the business is. The appraiser will include both the present dollar amount as well as include what the projected future income of the business will be, current capital and assets, and even the “goodwill” of the business, such as its reputation and/or the value of the name of the business.
Are You Going Through a Divorce?
To learn more about asset and property division and other issues that need to be decided in a divorce, contact Peerless Law to meet with a skilled Frederick, MD divorce lawyer. Call our office today.