St. Charles Business Owner Divorce Lawyers

Kane County Divorce Lawyers Aiding Clients Who Own Businesses in Illinois

An acrimonious divorce has the potential to destroy a personal or family business. Yet all too often, a business owner is consumed by day-to-day operations and does not take the legal steps that could help to shield the business from a divorce action. Once a divorce has been filed, the fate of the business will be determined by the law and the willingness of spouses to negotiate.

At Weiler & Associates, Inc., we appreciate the extraordinary determination and resources that it takes to build a business and understand that the income from your business will be more important than ever after a divorce. We have extensive experience in handling divorces for business owners and spouses involved in family businesses, from sole proprietors to corporations with numerous employees. From that experience, we have developed insights and solutions for handling the division of assets and division of debts when a business is involved.

Top Concerns for Business Owners in Divorce

Some of the top concerns for business owners and their spouses in divorce include:

• Determining whether the business qualifies as marital or non-marital property.
• Obtaining an accurate and independent valuation of the business.
• Determining a fair division of property that best supports your goals for the future of the business.
• Understanding the tax consequences if you have to sell off some assets or take out a loan in order to keep the business intact.

When a Business Qualifies as Non-Marital Property

Under Illinois divorce law 750 ILCS 5/503, your business will be considered non-marital property-meaning your spouse cannot claim any share of it in the divorce-if any of the following is true:

• You owned the business, or a share of a business, prior to your marriage.
• You acquired or built the business during your marriage solely through a gift or inheritance.
• You acquired or built the business during your marriage using assets that were your personal property prior to the marriage or using assets that you personally received by gift or inheritance.
• You have a valid prenuptial or postnuptial agreement that defines the business as your sole and separate property.

If the business qualifies as non-marital property as explained above, then any increase in the value of the business remains your sole and separate property. However, the income of the business is typically treated the same as if you were paid a salary by a third-party employer, so it is therefore considered marital property.

However, your spouse may be entitled to reimbursement if marital property was invested in the business in any way or if your spouse contributed significant personal effort to the business. "Reimbursement" means that you are not required to grant your spouse a share of ownership in the business, but your spouse is entitled to receive an extra share of other marital assets in compensation.

When a Business Qualifies as Marital Property

You may think your business is entirely your own separate, non-marital property. However, generally speaking, all assets acquired by either spouse during the marriage is presumed to be marital property. Also, the commingling of marital and non-marital funds or assets has the potential to convert non-marital property into marital property. Your business may, in fact, be marital property if any of the following are true:

• You created the business from scratch during the marriage, even if it is incorporated in your name alone.
• You used savings accumulated during your marriage to invest in the business, regardless of whether those savings came from your own earnings or a combination of your and your spouse's earnings.
• You and your spouse both invested non-marital property in the business.
• You owned the business before your marriage but subsequently transferred it into some form of co-ownership. This could include giving your spouse shares of stock in your business corporation or titling business assets in both your names.
• You took out a home equity loan on your marital home to fund the expansion of the business.

Goals for Your Business After the Divorce

You will need to think carefully about your hopes and plans for the business post-divorce and to communicate your goals clearly to your attorney. For example, if you were the sole founder and operator of the business, your goal may be to keep the business intact so that you can continue to operate the business as you did prior to the divorce.

Business Savvy Divorce Lawyers in St. Charles, Illinois

If you and/or your spouse are owners or partners in a business, you will both want to engage lawyers with extensive experience in handling divorces for business owners. Contact us in our St. Charles office at 630-331-9110. We serve clients in Kane County including the communities of Batavia, Elgin, Geneva, Pingree Grove, and St. Charles.