Next to alimony and care for minor children, property division is one of the primary issues that all couples will face when going through a divorce in Illinois. Illinois divorce laws provide that assets are subject to equitable distribution.
This generally means that items will be divided between the parties according to the interests of fairness. In some cases the process seems relatively clear-cut with respect to certain real and personal property, such as the family home, vehicles, and financial assets.
Ownership in an Illinois business, however, is an entirely different, far more complex matter. Even the initial considerations for equitable distribution are complicated, and an agreement between the parties may not eliminate all challenges. It is wise to consult with a Lake Forest divorce attorney who can explain the legal details and offer advice on achieving your goals. Plus, you might find it useful to review some basics on how you divide Illinois business assets in a divorce.
Overview of Equitable Distribution
As mentioned, fairness is the goal when a court makes determinations on asset division in Illinois divorce. Though the details vary, there are two steps to equitable distribution:
- Classifying Property: The initial inquiry is whether the asset is marital or separate since in most cases only property acquired after the wedding date will be subject to division between the parties. Property must be categorized as non-marital (property from before the marriage and some property acquired during the marriage) or marital (all other property).
- Divvying Assets: After categorizing items, a judge will distribute the marital property equitably, which does not have to be a 50-50 split. There are numerous factors involved with assessing what is fair, a particular concern when the marital estate includes a business.
Challenges with Illinois Business Assets in Property Division
The two-step process for equitable division is more difficult when the asset at issue is ownership in a business entity. It is possible for a business to be part non-marital and marital, making dividing it complex. Additional challenges include:
- Even when classified as non-marital, a non-owning spouse may have an interest in the business when marital income, property or energies were contributed to it..
- To apply equitable distribution rules as part of the asset division process, the parties will need value the business, often needing to conduct a business valuation. There are multiple methodologies, and disputes can arise over which approach to use, often resulting in the valuation being contentious and expensive.
- Divvying up business interests is not as easy as changing a title or ownership document. Typically, one party will buy out the other’s interest, or both sell to a third party. Although uncommon, some ex-spouses opt to remain involved in the business and operate it as partners after divorce.
Trust a Lake Forest Divorce Attorney to Advise You
As you can see from this summary, property division can be a convoluted issue when the marital estate includes ownership in a company. If you are going through a divorce and want to know more about the business asset division, please contact attorney Michael C. Craven. You call (312) 621-5234 or go online to set up a consultation with a Lake Forest divorce lawyer.
The post How do You Divide Illinois Business Assets in a Divorce? first appeared on Divorce Attorney in Chicago.