10.7 Family Entities and Divorce

Family entities may be exposed indirectly to the effects of monetary awards pursuant to divorce.   The key is whether the interest increases during the marriage as a result of the spouse’s efforts or whether the increase is due to other factors.   If the increase is due to the (otherwise uncompensated) efforts of the divorcing spouse, the increase is considered martial property.

Thus, in Innerbichler v. Innerbichler, 132 Md. App. 207, 752 A.2d 291 (2000), the Court examined whether the increase in a husband’s stock value was attributable to his efforts and therefore produced a large marital award.   In McNaughton v. McNaughton, 74 Md. App. 490, 537 A.2d 1193 (1988), on the other hand, the appreciation in value of non-marital stock in the family business did not constitute marital property because the husband was otherwise well compensated and the appreciation was due to factors beyond the husband’s contribution.