Divorce & Your Business
As a business owner who is facing a divorce, you likely have a number of questions about your livelihood after the split. Will your spouse be entitled to a portion of your business? Will you have to buy out, or consider selling the business all together? If you keep the business, will your ex be entitled to future earnings? These questions and more can be answered by an experienced Baltimore divorce attorney.
Will the Business be Shared?
Maryland is a common law state, which means in a divorce the court resolves property claims through the principal of equitable distribution. The court considers a wide range of issue as it contemplates decisions about a business. Was the business started during the course of the marriage? If so, it may likely be considered marital property, even if one partner had nothing to do with its operations. Undoubtedly, if both partners ran the company together, each will have a claim to a portion of it. On the other hand, if the business was inherited, or the funds to start it were inherited or gifted to just one spouse, it may be possible to claim it as non-marital property. Similarly, if the business belonged to one partner prior to the marriage, it may be considered separate property, with a few provisos. The court will consider the value of the business at the time a couple married, as well as any contributions to the business that a partner made during the marriage. Did the contributing partner put in time or money that added to the value of the business? If so, there would likely be a claim for a monetary award based on an assessment of the business. Often, a business is considered part marital, and part non-marital property. Ultimately, the court will be interested in providing an equitable outcome for both spouses.
Forensic Accountants
In most situations, it will be necessary to determine the net value of the company. Forensic accountants who are familiar with this sort of thing must scrutinize a number of factors toward that end. Those factors include the financial statements, of course, along with some other matters that may impact the value of the business. Issues to be considered include:
- Where the business is located;
- The volume of business;
- Impacts related to branding;
- The longevity of the business;
- The business reputation of the owner.
Hiring the Forensic Accountant
A forensic accountant may be hired by an individual, jointly by the couple, or by your attorney. In some cases, the court will appoint one at the request of one or both individuals involved. Who completes the evaluation can have an impact on the outcome, as two different accountants may come to starkly different conclusions about the net value of a business.
Moving Forward
Any divorce has tricky issues to navigate. If issues relating to a company are a part of the equation, you’ll want an aggressive and ethical attorney working to ensure your interests are protected. At The Law Office of Hasson D. Barnes, LLC, that is precisely what you’ll get. Contact us in Baltimore for a confidential consultation.
Resource:
entrepreneur.com/article/231742
https://www.hbarneslaw.com/is-a-collaborative-divorce-for-you/
