There is typically a certain level of questions and concerns regarding the financial impact of a divorce settlement for those who are either considering or have already initiated the process of bringing a marriage to an end. This can especially be true if you are a business owner facing the prospects of divorce. After all of your efforts to establish and grow your company, you may justifiably be worried about how the division of property could affect things moving forward.
Illinois is an equitable distribution state where the court divides all eligible marital property in a manner deemed as fair by a family court. This can result in a significant variance in the total value of each qualifying asset to which you may ultimately have a right since fair doesn’t necessarily mean equal. Because of this, taking a proactive approach and doing all possible due diligence before your divorce proceedings can prove invaluable to your financial future.
Is your business separate or marital property?
The primary determinant in whether or not your business will be eligible for asset division is if it qualifies as separate or marital property. Separate property typically includes any assets you and your soon-to-be ex-spouse acquired before your marriage, while the majority of assets accumulated during the time you were married will usually qualify as marital property. There are several factors that a family court may take into consideration when making this determination, including the following:
- Whether or not your business was established before your marriage
- How much your spouse was directly involved with your business’ operations
- If your spouse was indirectly involved with your business by handling particular family matters that allowed you more time to focus on running your company
There are also certain means that can potentially prevent your business from becoming part of the division of property, such as shareholder and buy-sell agreements along with prenuptial and postnuptial agreements.
With so much at stake financially, especially considering that the valuation of your business could have a significant impact on other divorce-related matters, such as future child support or spousal maintenance payments, you owe it to yourself to take advantage of the professional resources readily available to you. An experienced Illinois family law attorney can carefully guide you through all the intricacies of the divorce process, increasing your odds of achieving the best divorce settlement possible.
