What Happens to a Family Business in an Illinois Divorce?

 Posted on July 09,2021 in Illinois Divorce

Getting divorced is always a challenging life event to go through. When spouses own a family business, ending the marriage becomes even more complicated. If you or your spouse owns a business and you are ready to end your marriage, you may be overwhelmed with questions. Will we have to sell the business? Will we both receive an equal share of the business assets? How should we accurately value the business? Is it possible to continue running the business jointly after the divorce?

The answers to these questions will depend on your unique situation as well as your plans for the future. However, one thing is certain: addressing a family business during divorce is complex. You will need to work with a skilled lawyer who has sufficient experience successfully handling business owner concerns during divorce.

Most Family Businesses Are Considered Marital Property

In an Illinois divorce, property is divided into two categories: marital and non-marital assets. Both spouses have a right to an equitable, or fair, portion of marital assets. If your business was established or purchased during your marriage, it is almost certainly considered a marital asset. Even if a spouse purchased the business before getting married, the business can become marital property if joint funds were used in the business or if the non-owning spouse made financial or non-financial contributions to the business.

The most common reason that a business is classified as non-marital property is that the business is excluded from the marital estate through a valid prenuptial agreement or postnuptial agreement. If your business is considered marital property, both spouses have a right to a share of the business’s value.

Dividing a Business During an Illinois Divorce

You have several options for addressing the business in your divorce. Some couples choose to assign the entire business to one spouse and assign property of similar value to the non-owning spouse. Other couples divide business assets equitably or sell the business and split the proceeds. In some cases, divorcing spouses are able to continue running the business together even after their marriage has ended. Regardless of the option you choose, you will need to have your business properly valued. The value of the business will influence not only the division of assets and debts, but also child support, spousal support, and other divorce issues.

Contact a Kane County Divorce Lawyer

The St. Charles divorce attorneys at Weiler & Associates, Inc. have extensive experience helping clients value and divide business assets during divorce. We can protect your rights and help you explore the advantages and disadvantages of different options. We can also work with you to negotiate a property division arrangement with your spouse. If needed, we will tenaciously represent your interests during divorce litigation. Call 630-331-9110 for a confidential consultation today.

Source:

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