What Happens If I Am Divorcing My Business Partner in Illinois?

 Posted on December 22,2020 in Illinois Divorce

For business owners, the division of marital property required in the Illinois divorce process can be challenging regardless of their spouse’s involvement or role in the business. However, if you and your spouse are business partners as well as life partners, the process becomes even more complicated. In order to ensure a fair outcome that protects your interests, you should work with an experienced divorce attorney who can advise you on the implications of your decisions.

Are Businesses Considered Marital Property in Illinois?

While a business that you owned prior to your marriage may be considered your personal, non-marital property, a business that you or your spouse founded or acquired during your marriage is usually considered marital property, even if the other spouse is not involved. If you and your spouse started or purchased a business together during your marriage, there is no question that it will be an important consideration in the division of marital property, and the same is likely true if your spouse became a partner in a business that you already owned. You may even have a business contract that further defines the terms of your partnership outside of your marital relationship, and such a contract will likely influence your options for dividing the business in your divorce.

Options for Dividing a Shared Business

During the divorce process, there are a few options for dividing a business asset in which you and your spouse are both partners. The option that works best for you often depends on your ability to communicate and cooperate with your spouse to reach an agreement. Possible arrangements include:

• Selling the business and dividing the proceeds. This option may make the division of marital property more straightforward, but it may be undesirable if one or both of you has a strong personal investment in the business or relies on it for regular income. If you do choose to pursue this route, it is important to work with a financial professional who can help you determine the business’s fair market value.

• Maintaining your business partnership after the divorce. If you and your spouse can maintain a constructive, civil relationship despite your failed marriage, it may be possible to remain business partners after your divorce, with ownership of the business continuing under the terms of your current arrangement, or slightly modified terms if necessary.

• Acquiring your spouse’s share of the business. If you want to stay involved in the business but your spouse is willing to walk away, you may be able to purchase his or her share in exchange for other marital assets. However, there may be limitations on this option if the business has other partners or shareholders. In some cases, your spouse’s share may need to be distributed among other shareholders rather than transferred entirely to you.

Contact a Kane County Divorce Attorney

If you are a divorcing business owner in Illinois, you need an attorney with a strong understanding of both family law and business law. At Weiler & Associates, Inc., we can help you protect your financial interests and negotiate the division of marital property to achieve an outcome that meets your needs. Contact our reputable and dedicated St. Charles divorce lawyers today at 630-331-9110 to learn what we can do for you.

Sources:

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm

https://www.nfib.com/content/resources/legal/a-small-business-owners-guide-to-divorce/

https://www.forbes.com/sites/frawleypollock/2019/03/11/how-your-business-partners-divorce-can-impact-your-firm/?sh=186124497eae