Equitable Distribution: Are Businesses Separate or Marital Property?

 Posted on December 00,0000 in Division of Property

Divorce is never a pleasant process, but understanding the procedures can make ending your marriage a lot less complicated. Divorcing spouses should know the difference between separate and marital property, as well as the meaning of “equitable distribution.”

Generally speaking, separate property is any asset that a spouse owned prior to the marriage. It also includes inheritance, compensation for a personal injury, and certain gifts received during the marriage. Marital property involves just about every other asset that the couple acquired during the marriage.

Illinois is an equitable distribution state. This means the courts will split property equitably—as opposed to “equally.” When dividing property, the courts will review your assets and determine which are marital property and which are separate property.

Many Americans are not aware of the fact that a business can actually fall under marital property and be subject to division. According to Forbes, the date the business started may influence whether the courts consider it marital or separate property.

How Will a Prenuptial Agreement Affect the Division of a Business?

Generally speaking, prenuptial agreements do protect assets that the courts would otherwise have divided. So, a prenup may ensure the courts do not divide the business. This is not always the case, though, as the courts can throw out a prenup if it is invalid.

In order for a prenup to hold up in court, the spouses must have signed it without being in a state of duress, and one spouse must not have coerced the other to sign. Additionally, the prenup should clearly define the value of the property.

Contact a Divorce Lawyer in DuPage County, Illinois

 If you wish to speak with an experienced DuPage County divorce lawyer about property division involving a business, contact the Law Office of Matthew M. Williams, P.C. today at 630-409-8184 to schedule a consultation. With nearly a decade of experience practicing family law, Mr. Williams has the knowledge to represent your interests during a divorce.