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The complexities of a business owner's divorce

For entrepreneurs in Maryland going through a divorce, dealing with the family business can be one of the most complicated parts of property division at the end of the marriage. Asset division is already one of the most contentious aspects of the divorce, and the involvement of a business may only intensify the complexity of the situation. One of the most important questions that can help both spouses to move forward in the process is determining the valuation of the business itself.

During the divorce process, ascertaining a correct value for the business is essential to completing the division of marital assets. All business valuation practices begin with reviewing the financial statements of the company; there are several approaches that can be taken, including the asset, market and income approaches. Each spouse should work with their attorneys and financial professionals to obtain their own valuation of the company.

In many cases, this can go beyond an immediate review of the financial statements to management interviews and looking directly at financial records. The history of the business is also relevant. If the business was owned by one partner prior to the marriage, only the increase in value during the marriage is part of the marital assets. Estimating the difference in value might be contentious and complicated process.

The valuation of the business can also interact with obligations to pay spousal support and child support. For example, if a spouse receives a share of the business, they may not be eligible to receive spousal support based on their spouse's future income from the same business.

People going through a divorce who own a business should be aware of the impact of their company on property division. A family law attorney may work with a divorcing spouse to represent their interests and strive to secure a just, fair settlement.

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