For anyone going through a divorce, it can be an uncertain and unsettling time. This feeling can be even more intense for small business owners, who are not only concerned with the end of their marriage, but also the uncertain future of their business. If you are a business owner approaching a divorce, here are some basic items that will help you start to plan.
Businesses as Marital Property
There are a few different scenarios that can determine if a business qualifies as marital property and therefore would be subject to division during a divorce. If the business was started during the marriage, at least part of it will likely qualify as marital property. For businesses that were started before marriage, any growth in value or assets that occurred during the marriage could also be considered marital property. In both cases, it does not matter if the business is only in one spouse’s name or if only one spouse was involved in the operations of the business. However, if the spouses signed a prenuptial or postnuptial agreement including the business and its assets, it may be protected.
Determining the Value of a Business
For both parties in the divorce, an important aspect to determine is the value of the business. There are financial professionals who can work to determine the correct value of the business, the potential for growth, and if applicable, each spouse’s percentage of business equity. Both spouses may have their own experts who reach different values and may be called to testify during the divorce proceedings about their methods.
Dividing or Selling the Business
Depending on each spouse’s plans for the future, couples may choose to divide their share of a business in various ways, including:
- They both agree to sell the business and divide the proceeds of the sale. The percentage each spouse receives can be negotiated during the divorce process.
- One spouse agrees to buy out the other spouse’s shares of the business. The buyout can be done using cash, exchanging the business shares for other marital property, such as the couple’s marital house, or a combination of various sources.
- If the spouses can agree on amicable terms, they could continue joint ownership after the divorce.
Call a Burr Ridge Marital Property Division Attorney
If you are going through a complex divorce, including one involving a business, it can be easier to manage with assistance from a knowledgeable DuPage County divorce attorney. At Botti Marinaccio, LTD. we have experience dealing with couples who are separating their marital property, including business assets. We will help you protect your interests and plan for a better future. Call 630-575-8585 to schedule your initial consultation.
Source:
https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+V&ActID=2086&ChapterID=59&SeqStart=6200000&SeqEnd=8675000