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Valuing a business during a divorce

When Maryland couples decide to end their marriage and one or both of them own a business, it is necessary to find out what the business is worth. A financial professional can make this determination, but depending on the specifics of the situation, there are different ways to approach this.

A business can get what is known as a "full valuation" or a "calculation of value." A full valuation is more thorough, and it might be needed for a judge or an arbitrator. However, it costs more and takes longer. A calculation of value is less thorough but might be sufficient in informal situations such as if a couple is negotiating an agreement or working with a mediator.

If the business is large and complex, a full valuation might also be needed. However, if the couple is able to cooperate, it is less likely that a full valuation will be necessary at the outset.

Property division can be a complex aspect of divorce, and ownership of a business may raise a number of issues. For example, if the business has several owners, some of them might have been required to sign prenuptial agreements. However, these agreements can be challenged. If a couple owns a business together, then they must decide how this will be handled. One person might buy out the other, or the couple might even agree to continue running the business. The business might belong to one person, but the other person might have worked there and contributed to its growth. Alternately, the other spouse may not have directly worked with the company, but they may have contributed by supporting the spouse financially in the early days of the business or even by running a household while the business owner focused on work.

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