As you confront the reality of divorce, it is not just the assets you share with your spouse that come under scrutiny but also the concrete manifestation of your life’s work: your business. You have built your enterprise from the ground up, investing your time, money, energy and dreams.
Your concerns about what happens to your business during a divorce are not only valid but also deeply personal. Unlike income, which you can easily divide, a business is a tangible asset that requires careful consideration.
You do not necessarily have to sell your business when you divorce your spouse. Although, you must first determine whether your business qualifies as marital property.
How to determine if your business is marital property
Did you start or acquire your business during your marriage? If so, it may be subject to division. However, if you owned the business before tying the knot, you might have a stronger claim to keep it out of the divorce proceedings. Yet, any increase in value during the marriage could still be up for discussion.
If your business is part of your marital property, you need to understand how Maryland law affects its fate. Remember, every decision you make must align with Maryland’s equitable distribution laws. Equitable does not always mean equal, but it does mean fair. And what is fair can be as unique as your business itself.
Alternatives to selling your business
Even though your business is marital property, selling it is not your only option. You could opt for a buy-out, where you purchase your spouse’s share of the business. Alternatively, co-ownership might work if you both agree to keep professional ties post-divorce. You could also negotiate by trading other assets in exchange for full ownership of your business. Regardless of the path you choose, an accurate valuation of your business is essential.
Divorce is a challenging chapter, but it does not have to spell the end for your business dreams. Making informed and strategic decisions can help ensure that your business thrives, even as you close the chapter on your marriage.