What Business Owners (Particularly Women) Should Know When Divorcing
Many people dream of owning their own business. The good news is that more and more women are becoming entrepreneurs, running their own companies and taking control of their lives.
However, owning a business can be complicated for married women or those about to be married in the future. That’s because should the marriage end in divorce, you’ll more than likely have to split your business with your ex-spouse.
This can be overwhelming, especially when you consider that other property has to be split as well. Plus, if there are children involved, there are also child custody and support obligations to contend with.
Having to split your business with your ex can also be frustrating if you have been doing all the work of raising children and handling household chores on top of running your company and earning income. That’s why you need to prepare and understand the laws involved so you can get the best outcome possible.
Your Spouse May Get a Large Percentage
Just because your spouse isn’t involved in your business doesn’t mean they won’t get anything in a divorce. Maryland is an equitable distribution state, so while your spouse may not get 50/50, they will likely get some percentage of your business based on what is fair. Fairness will be based on your spouse’s contributions to the business, as well as other factors, so don’t be under the impression that your spouse will get nothing. Unless you have a prenuptial or postnuptial agreement in place, the courts will likely award your spouse some percentage of your business.
Be Wary if You Employ Your Spouse
Many business owners hire their spouses at below-market rates, which can have them facing unfortunate repercussions in court during a divorce. A spouse who is not titled on the business and who has not been paid at market rate for their work can argue for a larger share of the business. Therefore, if you terminate your spouse’s position due to the divorce, keep in mind that you may have to pay more financial support until they obtain an equivalent position.
Financial negotiations can be complex in these situations.
Demonstrate Your Non-Financial Contributions
Don’t just focus on your business and any other financial contributions to your marriage. Think about all the things you do to maintain the household, such as housework and child care. This is important because there is often a huge gap when it comes to nonpaid work in a marriage, especially in relation to genders. For example, women, on average, spend 5.7 hours per day performing household tasks, while men spend 3.6 hours per day. In Maryland and other equitable distribution states, the value of this unpaid work can affect the distribution of assets.
Contact a Maryland Family Law Attorney Today
More and more women are starting their own businesses. While this is a great thing for women to achieve, it can be challenging in the event of a divorce.
Seek legal help from a Columbia divorce lawyer from The Law Offices of Todd K. Mohink, P.A. We can help you deal with dividing businesses and other challenges. To schedule a free consultation, fill out the online form or call (410) 774-5987.