Protecting Family Business Interests During a Divorce

 Posted on August 16, 2022 in Illinois Divorce

For many people, property division is one of the most challenging aspects of divorce. When it comes to business interests, dividing property becomes more complicated. Typically, the two ways to consider property division during a divorce are shared marital property or individual property. Depending on whether or not spouses share a business, there are different ways to protect your interests legally.

Is Your Business Shared Property?

The first step in ensuring you retain maximum interests within your business during a divorce is understanding whether or not it is shared. Illinois law considers a business unshared if you owned the company before getting married, you built the business with inheritance or your own money, or a prenuptial or postnuptial agreement states that only one spouse owns the business.

A company may be considered shared marital property if:

• The business was created during the marriage
• You used marital funds or savings to develop or invest in the business
• Both spouses invested their sole property into the business
• The owner gave the business co-ownership between spouses
• You used money from a home equity loan from a shared house to invest in the business

If the business is not shared, it is considered the owner's sole property and will be handled as such during the divorce. However, if the company is considered shared marital property, spouses may have to divide their interests.

Determine the Value of the Business

Business valuations determine the worth and value of a business, which is critical for divorce. When dividing shared marital property, understanding the worth of the financial interests will be important to determine how much of a share each spouse will receive. There are a few approaches the analysts can use to determine the worth of a business, including the market share value, the business's overall profitability, or adding up all of the business's assets.

Protecting Your Rightful Interests

During the divorce process in Illinois, partners will have their marital property divided in an equitable but not necessarily equal way. Property is not always split 50/50. Suppose one spouse acquires an asset that is worth more than other assets. In that case, the other spouse may receive a larger share of something else. For example, one spouse obtains sole ownership of the marital home, so the other partner gets a larger share of the family business to offset any inequalities.

If your primary priority during your divorce is protecting your interest in a shared enterprise, you should share this with your attorney. During negotiations in creating a divorce decree, a skilled attorney can help advocate for your desires to retain a more extensive, or sole, share in your business.

Speak With a Divorce Attorney in St. Charles About Business Valuations

At Weiler & Associates, Inc., our team of skilled Kane County divorce lawyers have experience representing clients on business interests. We can help you determine the value of your business and protect your right to make decisions on your business throughout a divorce. Please reach us at 630-331-9110 to meet with us for a consultation.

Source:

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000