Dividing marital property during a divorce is often complex, but the stakes are even higher when a business is involved. For many couples, the business isn’t just an asset—it’s a livelihood. Determining how to divide it fairly while preserving its value requires careful planning and often, legal expertise.
At Shark Lawyers for Men, we help husbands and fathers in Illinois navigate the complexities of divorce, including business division. Below, our team of experienced divorce lawyers created a general outline for what you need to know about dividing a business in an Illinois divorce.
Is the Business Marital Property?
In Illinois, only marital property is subject to division during a divorce. Businesses started or acquired during the marriage are generally considered marital property. However, businesses owned before the marriage or received as an inheritance or gift are typically classified as non-marital property, unless they’ve been commingled with marital assets.
For example:
- Marital Property: A business launched with shared funds during the marriage.
- Non-Marital Property: A business owned before the marriage, kept separate from joint finances.
A thorough review of financial records is essential to determine whether the business—or any part of it—is subject to division.
Valuing the Business
Once it’s determined that the business is marital property, the next step is valuation. Accurately assessing the value of the business ensures that both parties receive a fair division of assets.
Methods used to value a business include:
- Income Approach: Based on the business’s earning potential and cash flow.
- Market Approach: Comparing the business to similar ones recently sold.
- Asset Approach: Evaluating the value of the business’s assets minus liabilities.
Hiring a qualified business appraiser is often necessary to provide an objective valuation.
At Shark Lawyers for Men, we will work to ensure your business is accurately valued, protecting your financial interests.
Options for Dividing the Business in an Illinois Divorce
Illinois courts aim for an equitable (fair) distribution of marital property, which doesn’t always mean a 50/50 split. When it comes to dividing a business, there are several approaches:
- One Spouse Buys Out the Other:
One spouse retains ownership of the business and compensates the other for their share, either with cash, other assets, or through a structured settlement. - Selling the Business:
The business is sold, and the proceeds are divided between both spouses. This option is common when neither party wants to continue running the business. - Co-Ownership Post-Divorce:
In rare cases, couples agree to co-own the business after divorce, maintaining its operations while splitting profits. This option requires clear communication and a solid partnership agreement. - Dividing Business Assets:
If the business is not viable to continue, its assets can be liquidated and divided between the spouses.
The best option depends on the nature of the business, the financial circumstances of both parties, and their willingness to collaborate post-divorce.
Protecting Your Business Interests
If you’re a business owner, protecting your interests during a divorce is critical. Steps to safeguard your business may include:
- Keeping clear financial records to differentiate marital and non-marital assets.
- Ensuring the business is properly valued to avoid overpaying for a buyout.
We understand the complexities of dividing a business and will help to protect what you’ve worked hard to build. Our team of experienced family law attorneys will guide you through every step of the process, fighting for a fair outcome.
How Illinois Courts Decide
Illinois courts consider several factors when determining how to divide a business, including the contributions each spouse made to the business, the financial needs of both parties post-divorce, and whether one spouse can continue operating the business.
Courts strive to balance the interests of both spouses while preserving the business’s value and viability.
Contact Shark Lawyers for Men Today
Dividing a business during a divorce is a complex process, but with the right preparation and legal support, you can protect your financial future. At Shark Lawyers for Men, we help advocate for men and fathers during divorce, ensuring their rights and assets are safeguarded.
If you’re facing a divorce involving a business, don’t navigate it alone. Contact us today to schedule a consultation. Let us help you protect what matters most.
