How Owning a Business Can Complicate Your Divorce in Illinois

 Posted on August 24, 2021 in Divorce

A divorce does not always get settled easily. There are various factors that can complicate a divorce, such as a family business. If you and your spouse own a business together and plan to get divorced, it is important to understand how it could potentially impact proceedings.

Negotiating a Settlement With Your Spouse

Ideally, divorcing couples will come to a fair agreement on dividing their business. Once you and your spouse have determined the value of your business, try to negotiate a settlement. It is less costly and stressful than letting the process drag out in litigation. For instance, you may decide to buy out the other party or continue to run the business with your spouse after the divorce. Another option is to sell the business and divide the profits with each other. A divorce lawyer with experience handling business assets in a divorce can represent you during property division negotiations and ensure that your rights are protected.

Marital vs. Non-Marital Property

If you and your spouse cannot come to an agreement on how your business should be divided, the court will have to make the decision. The first thing a judge will look at is whether the business is marital or nonmarital property. Marital property is acquired during a couple’s marriage, while nonmarital property is acquired before a couple ties the knot. If the business was acquired before your marriage, it will typically go to the partner who owned it first. However, it is possible that a business owned before the marriage may be classified as a marital asset if joint funds were used to grow the business or the other spouse contributed to the business in any way.

Distributing a Business in Divorce

If the business part of the marital estate, spouses will be entitled to part of the business’s value. In Illinois, marital assets are divided equitably rather than equally. The judge may consider several factors when deciding what portion of the business each spouse will get. For example, the judge may decide to give a bigger share of the business to the spouse who contributed the most time and money to it. The judge may also consider the length of the marriage, the ability of each spouse to provide for themselves after the divorce, and how much time each spouse will devote to raising children.

Contact a Kane County Divorce Attorney

Dividing a business during a divorce can be a tricky matter. If you have plans to divorce your spouse, an Aurora, IL divorce lawyer from the Law Office of Matthew M. Williams, P.C. can help. We understand how difficult this process is and can guide you through the process. Call us at 630-409-8184 to schedule a confidential consultation.

Source:

https://www.nfib.com/content/resources/legal/a-small-business-owners-guide-to-divorce/