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How are business assets divided in a divorce?

A great deal of hard work no doubt went into establishing your business in Rockville. The same might be said of your marriage. Your concern for the former will doubt then be affected by the dissolution of the latter. You may question why your soon-to-be ex-spouse is able to profit off of your business when you were the one to establish it. Yet it should be remembered that per Section 8-201 of the Maryland Code detailing Property Disposition in Divorce and Annulment, a marital asset is defined as any that you acquire while married. While your business as a whole might not meet this criteria, any interest it gained while married would. 

How is that interest determined? Say you owned one location before you were married, and then expanded to five during your marriage. The court may then determine that 80 percent of your business' value is subject to property division. How much of that interest your ex-spouse will be entitled to depends largely on his or her actions related to the company's growth, such as if he or she helped finance your business' expansion, or whether he or she participated in its daily operations. 

When valuing the interest in your business to be divided amongst you and your ex-spouse, the court will seek to determine its fair market value. This is typically done by bringing in an investor or other professional in your particular field and seeing what he or she would pay for the determined interest. 

There may be ways for you to retain the value of your business in its entirety. Most will, however, require you to relinquish your claim to other marital assets in order to convince your ex-spouse to give up his or her interest in your company. 

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