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Could a divorce leave me with half of my spouse’s business?

On Behalf of | Jan 27, 2023 | Divorce |

Divorce court judges may approve of spouses dividing ownership of a business that started during their marriage. Maryland’s equitable distribution statutes allow you and your soon-to-be ex-spouse to negotiate a fair division of your marital property.

As noted by, marital property includes all assets and income acquired by either spouse while married. You may discuss dividing ownership stakes in a business even if you did not play a role in its management. You could also negotiate dividing stocks or bonds in a spouse’s financial account.

Protecting businesses from division

A spouse intending to keep 100% ownership of a business may need to forgo other marital assets. To hold on to your stake in a partnership, you could, for example, discuss giving up your fair share of the home you and your spouse lived in. You may also consider trading other shared real estate, such as a vacation home, for full ownership of a business.

In some cases, business owners agree to buy their ownership stakes from their ex-spouses. Divorce settlements may contain payment arrangement plans. The court could, however, require verification of both spouses’ commitment to the plan.

Selling assets and dividing net proceeds

You may need to discuss a plan to divide shared household debts fairly. It could make sense to sell your business or other marital assets to pay off outstanding loans or credit card bills. The remaining sale proceeds may then divide fairly between you and your spouse.

If you or your spouse cannot reach an agreement to divide assets, the court may make a final decision based on a judge’s view of fairness. Maryland law does not generally recognize each spouse receiving “half” of an asset as an “equitable” division. Divorcing couples may, however, determine what reflects a fair division before heading to court.