Question By: In Maryland, determining whether a business is considered a marital asset involves examining several factors under the state's equitable distribution laws. Key considerations include:
Timing of Business Acquisition: If the business was established or acquired during the marriage, it is typically deemed a marital asset. Conversely, a business owned before marriage is usually classified as separate property, although this distinction can become complex if the business appreciates in value during the marriage.
Contribution of Spouses: Both financial and non-financial contributions of each spouse to the business are scrutinized. Contributions may include monetary investments, time, effort, or support that enabled the business to thrive. Even if one spouse did not directly participate in the business operations, their support (e.g., managing the household) might be considered.
Commingling of Assets: If marital funds or joint resources were used to support or grow the business, it might transform into a marital asset. Commingling of personal and business finances can complicate the distinction between separate and marital property.
Ownership Structure and Agreements: Legal documents such as prenuptial or postnuptial agreements can influence the classification. These agreements might specify the business as separate property, notwithstanding contributions made during the marriage.
Business Growth and Appreciation: If the business significantly increased in value due to efforts made during the marriage, the appreciation might be regarded as a marital asset, even if the business itself was initially separate property.
Start on a clear path in your divorce case by contacting Shah & Kishore. Call their Montgomery County asset division attorney for a free consultation. For more information, visit: https://maryland-lawoffice.com/is-a-business-always-considered-a-marital-asset-in-maryland/
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