In Maryland, marital property generally includes any assets acquired during the marriage, regardless of whose name is on the title. This includes any commercial real estate property you purchased while married. During a divorce, the court may subject this asset to division.
Valuation is crucial
Determining the value of a marital asset is a crucial step in the divorce process. Professional appraisers typically use a variety of methods, such as comparing the property to similar ones recently sold or estimating the property’s value based on its potential income.
However, knowing the value of a commercial property can be challenging, especially if:
- It is tied to a family business
- There are existing leases or tenants
- The property has a mortgage or other debts attached
Accurate valuation is essential because it directly impacts property division during divorce negotiations. Since this process can be complex, consulting with an attorney may be beneficial.
The court considers various factors
Maryland follows the principle of “equitable distribution.” This doesn’t necessarily mean a 50-50 split. Instead, the court considers a range of factors to ensure a fair division. For assets like commercial property, they might consider:
- Each spouse’s contribution to the property
- The financial situation of each spouse
- Tax implications of different division options
It’s worth noting that “contribution” doesn’t just mean financial input. For example, if one spouse managed the property while the other focused on their career, the court would consider both contributions.
You can have several options
The court has the authority to make decisions about property division. However, if the couple can reach a mutually acceptable agreement, the court will typically approve it. Here are the main options divorcing parties often consider:
- Sell the property and split the proceeds
- One spouse buys out the other’s share
- Continue joint ownership after divorce
Each option has its pros and cons. For example, selling might provide a clean break but could result in tax consequences. Buyouts can be tricky if one spouse can’t afford it. Continued joint ownership might work for some but can lead to future conflicts for others.
Protect your business interests
Every divorce involving commercial real estate is unique. While this overview provides a general understanding, the specifics of your situation may vary. Reach out to an attorney to discuss your options.