Illinois is an equitable division state when it comes to property division in a divorce, but not all assets are necessarily easy to split. When one spouse begins a business during a marriage, the company typically becomes marital property. Both spouses have a right to an equitable share of marital property.
Even when a spouse starts a business before getting married, the company can still become marital property if both parties’ funds were used in the company or the non-owning partner makes any contributions to a business. There are steps people can take to protect their businesses in a divorce.
How Businesses Get Handled in Divorces
There are multiple steps people can take to protect their business interests when they are getting married, and the best move can often be to put an agreement in writing. Prenuptial agreements are one of the clearest ways to stipulate that a business will not be considered marital property.
After a marriage, spouses can sign a postnuptial agreement articulating the same provisions. Even when you miss a prenuptial opportunity, a postnuptial agreement can serve the same purpose.
In most divorce cases in which businesses do need to be split, the spouses may agree to assign ownership to one spouse and give property of a similar value to the other spouse. Some spouses may agree to sell a business and split the earnings, while others may try to continue running a business together despite the divorce.
When one spouse had an active role working for a company but will no longer be working after a divorce, there may need to be a maintenance or support agreement in place to make up for lost income. When a business is being valued, most people will either use an asset-based approach that uses a company’s assets to determine value, a market-based approach that relies on sales of businesses of similar sizes to determine value, or an income-based approach that uses a company’s earnings to determine value.
Contact a DuPage County Divorce Attorney
If you have business interests that you need to protect for a divorce in Illinois, do not try to figure everything out on your own. You will want to seek the help of the Naperville divorce lawyers at Calabrese Associates, P.C. for more than four decades of experience navigating the complexities of cases throughout DuPage County.
Our firm initially meets with people for 90 minutes to discuss their cases and get a better understanding of the issues they are dealing with so we can offer proper legal advice. You can call 630-393-3111 or contact us online to set up an introductory consultation.