In Maryland, the value of a business interest acquired during the marriage is considered marital property, even if it is owned and operated by only one spouse.
Upon divorce, the Court must determine the “fair market value” of a spouse’s business interest, which is what a willing buyer would pay a willing seller, neither being under the compulsion to act and both having reasonable knowledge of all relevant facts.
However, a spouse’s “personal goodwill” in the business is their non-marital property, not subject to equitable distribution by the Court. “Personal goodwill” is the part the business value which is directly attributable to the reputation and success of the spouse owner.
Business valuation in divorce is a complex issue in divorce cases, often requiring forensic analysis of business records and an industry professional testimony.