Divorce can be complicated and, for business owners, it can be even more difficult to navigate as you begin to untangle and divide certain assets and liabilities. In Illinois, once property is classified as separate or marital and assigned a value, it will be distributed among both parties. This can be fairly straightforward when it comes to bank accounts, but a little hairy when it comes to a business.
How Divorce Can Impact a Business
Divorce can put you in a tough position if you own a business. Your former spouse might end up becoming your business partner, or you might have to give up a large chunk of your business, neither of which sound like great options. However, if you have other valuable assets, such as cars, another home, stocks, retirement accounts, you might be able to pay your former spouse his or her share of the business with these items rather than giving up part of your business, allowing you to keep the business you worked so hard to grow.
If you are not interested in keeping your business, you might also consider liquidating it and splitting the proceeds with your ex-spouse.
What if I Started the Business?
If you started the business prior to your marriage, it is still likely that it will lose its separate property status. For example, if the value of the business increased during your marriage, the increase in value would be considered marital property and subject to division. If your spouse contributed to the business during your marriage, the business would also be considered marital property.
Of course, you can take certain measures to protect your business from divorce. One of the most obvious options would be a prenuptial agreement. However, a postnuptial agreement or even a buy-sell agreement could effectively protect your business. If you want the business to remain as separate property, you could also consider keeping personal and business expenses separate.
Divorce Attorneys in Illinois
If you are considering filing for a divorce and are concerned about your business, you need a skilled and experienced attorney on your side to help ensure your interests are well protected. At Wakenight & Associates, P.C., our family law attorneys in Illinois have the knowledge and insight to help achieve the best possible outcome in your divorce case. Reach out to us today.
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