Keeping Your Business Safe During an Illinois Divorce

 Posted on September 05, 2024 in Illinois Divorce

Divorce can disrupt not only personal lives but also the financial foundations of a business. For business owners in Illinois, navigating the complications of a divorce requires careful and strategic planning to safeguard the company against the perils of Illinois divorce. Here are some key considerations to protect your business during your divorce. Discuss with a lawyer ways to ensure that your business survives the divorce and can function effectively before, during, and after your divorce.

Document the Source of Funds

One of the most effective ways to protect your business during a divorce is by thoroughly documenting the source of funds that were invested in the business. If you can clearly demonstrate that the capital used to start or grow your business originated from non-marital assets (such as inheritance or pre-marital income), it may help classify those funds as yours alone.

Keep detailed records, including bank statements, receipts, and any supporting documentation that illustrates the origins of these funds. In Illinois, presenting this evidence can be crucial in ensuring the court recognizes these assets as non-marital.

Keep Separate Business and Personal Assets

Mixing or commingling business and personal assets can significantly complicate property classifications during a divorce. To maintain the distinction between your business and your personal finances, it is important to keep them separate. Use dedicated business accounts for all transactions related to the business and refrain from using business funds for personal expenses.

This clear separation of assets not only helps you track your business’s financial performance but also strengthens your position in court should a dispute arise.

Pay Yourself a Competitive Salary

Courts in Illinois recognize that income derived from personal effort during the marriage is considered marital property under 750 ILCS 5/503(a)(8). This means that if you invest all your business profits back into the business or pay yourself a minimal salary, your spouse may later argue that those earnings are marital property.

To avoid this situation, ensure that you are paying yourself a competitive salary that reflects your contributions to the business. By doing so, you can assert that the income you gain from your efforts is appropriately classified and supported by your salary.

Contact Our St. Charles, IL Divorce Lawyers

While navigating a divorce is certainly not a fun process, strategies such as documenting the source of funds, avoiding asset commingling, and maintaining a fair salary can help strengthen your position during the divorce proceedings. Always contact a legal professional to help develop strategies that best suit your circumstances. Contact the seasoned Kane County, IL divorce attorneys with Weiler & Associates, Inc.. Call 630-331-9110 for a private consultation.