Divorce can be a long and stressful process. However, when your business is involved, the process can become more complex. Illinois follows an equitable distribution of assets during a divorce. This means that assets are designated as marital or non-marital property and all marital property is divided fairly between both spouses. Assets deemed as non-marital are returned to the spouse who acquired them. Marital property includes assets acquired during the marriage with certain exceptions. Non-marital property are assets acquired prior to entering into the marriage. Distinguishing between non-marital assets and marital assets is especially important when evaluating how your business may be affected during a divorce.
The Business as a Non-Marital Asset
If you started your business prior to getting married, it will be considered a non-marital asset and will belong to you after a divorce. However, it is possible for several issues to surface even when your business is considered a non-marital asset. For example, if you started the business prior to the marriage, but then expanded and the business significantly grew during the course of your marriage, the growth may be considered marital property. Various factors, such as whether marital funds were used to expand the business, would be considered by the court to determine if your spouse is entitled to the newly expanded portion of the business. It is important to note that although your business as a whole may be considered a non-marital asset, any income you receive as an employee of the business while you are married will be a marital asset and subject to division.
The Business as a Marital Asset
If you started your business after getting married, it will be subject to division. However, courts rarely divide a business for the purposes of a divorce. Usually one spouse will be awarded the business and the other spouse will be awarded a sum of money or property that is equivalent to the value of the business. Although this may seem straightforward, it can actually be very complicated since often times spouses disagree on the dollar amount of the business valuation. Thus, it is in the couple’s best interest to hire a reputable business valuation firm that will provide an accurate number.
Hire an Experienced DuPage County Divorce Lawyer
The best way to safeguard your business prior to getting married is to plan ahead and have your spouse sign a prenuptial agreement. However, if you are contemplating divorce in DuPage County and are concerned about your business interest, contact a knowledgeable DuPage County divorce attorney at Sullivan Taylor, Gumina & Palmer, P.C. to help you through the process. Our lawyers work closely with certified business appraisers and have access to several resources that can help you protect the business that you worked so hard to create.