Owning a family-run business can be an incredibly rewarding experience, but it does present certain complex legal challenges during a divorce or legal separation. Your business may be the most valuable asset you own, as well as your primary or sole source of income, meaning that filing for divorce can put your business at risk and seriously impact your financial stability. Obtaining a divorce can be a time-consuming process, and during this time, you are likely unable to dedicate the same amount of time and effort to your business as you will be tied up with multiple attorney meetings, mediation sessions, court dates, and other appointments related to the divorce. However, the most common concern for business owners facing divorce is property division, or what exactly will happen to their business after the divorce is finalized.
If you own a family business and are filing for divorce, you probably have several questions about how this will affect your business. At Vahey Law & Mediation, our team of family law attorneys has years of experience handling cases involving Joliet divorce and family-owned businesses and helping our clients obtain the best outcome in their cases. We provide comprehensive, compassionate, and dedicated legal representation to protect your interests and preserve the future of your business. Learn more below, then contact us to speak with our team.
Many, if not all, of the decisions that will be made regarding your business will occur during the process of property division. During this process, you, your ex, and both of your attorneys will come together to discuss who will receive which assets from the marriage after legal separation. As a business owner, one of the first factors you need to determine is whether the business is subject to division under Illinois law. The state does differentiate between marital property and nonmarital property, with any marital property referring to any assets or property that either spouse acquired during the marriage and before the final divorce judgment is entered. Any marital property is subject to division in a divorce.
When making property division determinations, the court will treat your business as they would treat any other asset, meaning they will review business documentation and other evidence to establish its value, then follow equitable distribution guidelines to allocate this asset. The simplest way to prove that your business is nonmarital property acquired before your marriage is to show that it was legally formed before your marriage became official. However, judges take several factors into account when making this decision, and this factor alone is not a definite predictor of how your business will be handled.
Typically, it is only in limited circumstances that the court will determine that a business you or your spousal partner-owned during your marriage should not be considered nonmarital property, including:
When making the determination for division of your business, the judge will consider the following factors:
After you, your ex, and your attorneys have concluded that you are both legally entitled to a portion of the business, the next step is to determine the value of the business. The most popular methods for business valuation are listed below.
If you are interested in continuing to own and maintain your family-run business and your ex is not interested in doing so, you may be required to forfeit a portion of other marital assets and property to receive their part of the business. In cases where business ownership is contested, the court will evaluate the factors described above to make a final decision about the value of the business. Typically, spouses can determine the value using one of the three methods described earlier, but the court must still approve this agreement for it to become valid and legally binding.
You worked hard to build your business from the ground up, and the last thing you want to lose in a divorce is the investment of time, money, and energy you made into creating this business and helping it thrive. The best chance you have for protecting your business and maintaining ownership of this asset is to hire an attorney who specializes in Joliet divorce and family-owned businesses. The family law attorneys at Vahey Law & Mediation understand the complex legal challenges involved in filing for divorce when your business is on the line, and we offer the knowledge, experience, and skill you need to achieve the best results.
Contact our team today to schedule a consultation and obtain valuable peace of mind that your most precious asset is in capable hands. Regardless of how complex your situation may be, we can help you navigate your divorce toward the most favorable resolution. If you need counsel on appeals or modification after decision by the court, we can help you navigate the process. We offer collaborative divorce and mediation services to help you negotiate divorce terms outside of the courtroom and can move forward with litigation if your spouse refuses to agree to a fair arrangement. Our legal experts are fully equipped and prepared to protect your rights, fight for your interests, and represent your case until we reach a successful outcome for you and the future of your business.