Navigating Divorce as an Illinois Business Owner

 Posted on December 06, 2024 in Divorce

Divorce tends to be a challenging process for people to go through, whether logistically, financially, or emotionally. If you own a business in Illinois, it can be even more complicated. Your business might be one of your most valuable assets, so it is important to understand how it will be addressed in your divorce and whether it will be considered separate or marital property. If you are a business owner considering ending your marriage, consult with a qualified Arlington Heights, IL divorce lawyer to review your options.

Is Your Business Marital or Nonmarital Property?

An important step that is necessary before you can proceed is determining whether the business you own is considered marital property or separate property.

• Marital property includes assets and debts acquired during the marriage. If you started or grew your business during your marriage, there is a good likelihood that a judge would consider it marital property, even if you are the only person listed as the owner and your spouse is not involved.

• Nonmarital property describes assets that either spouse owned before the marriage or received as inheritance or a gift. If you owned the business before you got married, or if you received it as an inheritance or gift even after your marriage began, the business might be classified as nonmarital property.

How Much is Your Business Worth?

If your business is considered marital property, it needs to be valued before you can decide how it will be divided in the divorce. Illinois courts often use professional appraisers to determine a business’s worth. The value can include:

• Tangible assets, such as equipment or inventory

• Intangible assets, such as brand value or customer relationships

What Are the Options for Dividing a Business?

Once a business that is considered marital property is valued, the next step is deciding how to divide it between the spouses. Some possible options for dividing it include:

• Selling it and dividing the proceeds. This is a particularly fitting option when neither spouse wants to continue running the business or if there is no clear, fair way to divide it.

• One spouse buys out the other. If one spouse wants to keep the business and the other does not, this can be a good option. The buyer can buy out the seller’s share in one lump sum or can set up a payment plan to pay it off over time.

• Keep owning the business together. In rare cases, spouses continue co-owning a business after divorce. This tends to happen more with small, family-run businesses. While it means they can continue as they were and do not need to divide the business, it requires them to maintain a working relationship, which can be challenging after a divorce.

There can be tax implications when one spouse buys out another or they both sell the business. A knowledgeable attorney can help you navigate the transaction so that it proceeds as smoothly as possible.

Contact an Illinois Family Law Attorney

The process of valuing and dividing a business in divorce can be challenging, which is why it is important to work with a skilled Arlington Heights, IL divorce lawyer who understands the complexities involved. At A. Traub & Associates, we have experience helping families and individuals navigate divorce. We are dedicated to finding a resolution you can feel comfortable with. Call us at 847-749-4182 to learn more about how you can benefit from our services.