Divorce Laws for Business Owners in Washington, D.C.

by Wayne Thomas
Property must be divided fairly when divorcing in Washington, D.C.

Property must be divided fairly when divorcing in Washington, D.C.

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Sharing property between spouses is fundamental to most marriages. When a couple gets a divorce in Washington, D.C., most assets acquired during the marriage are divided. If the couple does not agree on a distribution plan, a judge divides the property based on fairness. If one or both spouses owns a business, it gets valued and either split between both spouses, or awarded to one spouse and offset with property awarded to the other spouse.

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Property owned by a couple during marriage must be divided as part of every divorce. Washington, D.C. is an equitable distribution jurisdiction, which means that if the parties cannot agree, all assets considered martial property will be divided according to the principle of fairness. This requires a judge to look at monetary and non-monetary contributions to the marriage, including services as a homemaker. Marital property that is considered subject to distribution generally includes all assets acquired during the marriage, excluding property obtained by gift or inheritance. Marital property typically does not include property acquired before the marriage.


In determining a division plan that is fair to both parties, the court considers several factors outlined in the law. These factors include the length of the marriage, the age and specific needs of each party and each spouse's future earning capacity. Further, the court may take into consideration the contributions of either party to preserve or increase the value of any marital assets. Because the purpose of the law is to achieve fairness, a court need not give equal weight to each factor.

Valuing a Business

All ownership interests in a business acquired during the marriage generally fall under the category of a marital asset for the purposes of property division. However, setting an appropriate value for the property can be difficult, particularly if there are intangibles involved, such as goodwill. Goodwill means value above and beyond the net worth of the company assets and plays an important role in determining the business's market price. Experts can offer conflicting testimony when it comes to goodwill, however, a court is not required to adhere to any specific method when setting value. But, the judge must present how she arrived at a certain computation in writing.

Apportioning the Business

Once a value has been placed on the business, a judge must consider whether the property should be divided or awarded solely to one spouse. If only one spouse operated the business during the marriage, the court may be persuaded to award him the entire asset. This might be based on the assumption that conflict would arise if joint ownership were established, or if another person purchased the ownership share. However, depending on the size of the marital estate, an award of the business might be offset by transferring additional property to the other spouse. This might include property that also is not easily capable of division, such as the marital home. If insufficient assets are available, a court also has the authority to order alimony payments to ensure an equitable result.