Divorce can be easy, complicated, or somewhere in between. One factor that might make the process more involved is when one or both spouses own a business. Much depends on the couple’s state, shared history, and what the company is worth.
Some divorcing couples have prenuptial agreements to help dictate how the business will be divided. It might specify that one partner was designated as the sole owner, or a documented partnership could exist. The business will also need to be valued before further steps are taken. This involves determining the tangible and intangible property and assets like checking accounts and liabilities like mortgages. An experienced appraiser will be able to help with this.
Selling the Company
This is typically a last resort when other methods will not suffice. However, selling it could be problematic if the business is not profitable. Market conditions will influence the value of the business, so many couples choose to wait until things improve.
Rather than selling the business, it may be possible to continue jointly owning the company once the divorce is finalized. Both parties need to realize the importance of being amicable, however.
Buying Out the Other Spouse
This is the most common way for divorcing couples to divide family businesses. One spouse buys out the other’s interest in the company – the amount of money might reflect half of what the business is worth, more or less. However, the spouse who pays must have enough assets to buy the other one out.
Will I Lose My Family Business During the Divorce?
Having your family business put at risk can cause a lot of anxiety and stress, whether the company was created during a marriage or by earlier generations. It can become a real battleground when spouses disagree on the best outcome. If divorce is imminent, it is wise to act quickly.
Divorcing couples must understand that Maryland is an equitable distribution state. Courts do not always divide up marital property equally between spouses. They focus on what they decide is fair.
Our Baltimore County Divorce Lawyers at Huesman, Jones & Miles, LLC Help Divorcing Couples Who Own Businesses
A jointly owned family business can complicate a divorce, but our skilled Baltimore County divorce lawyers at Huesman, Jones & Miles, LLC can work to protect your future. Call us at 443-589-0150 or contact us online for a free consultation. Located in Hunt Valley and Towson, Maryland, we serve clients in Baltimore, Baltimore County, Bel Air, Bentley Springs, Columbia, Freeland, Hereford, Hampton, Westminster, Essex, Monkton, Sparks Glencoe, Parkton, Phoenix, Pikesville, White Hall, Carroll County, Harford County, and Howard County.