An Illinois divorce may already be a challenge but when couples are business partners, it adds a new layer of complexity. If your soon-to-be ex-spouse co-owns a business, it may be a subject of contention during the proceedings. Legal knowledge of how your business intersects with your divorce can help you protect valuable business assets and interests.
What impacts business divisions?
Under the Illinois Marriage and Dissolution of Marriage Act, the court distributes marital property equitably. It divides assets and debts you and your spouse own fairly— but not necessarily equally.
Numerous factors determine whether your shared business is marital property. The timeline of your business’s creation can affect how the divorce process treats your business. Illinois evaluates and divides marital business interests based on:
- Acquiring or forming your business during the marriage: Illinois presumes that all property acquired by either you or your spouse during the marriage is marital property.
- Starting or acquiring your business before marriage: You or your spouse may have formed a business prior to your marriage, and the other helped out. There may be more nuance influencing the decision. A court may deem a portion of the business’ appreciation as marital interest or property.
Valuation and division factors
Once the court determines if your business is marital property, then deliberation on division can begin. Illinois’s equitable distribution system does not divide any property on a strictly 50/50 basis and that includes businesses. Judges determine fair splits using multiple factors, such as spousal contribution to the business, financial standing and the type of business.
Special circumstances may influence division. In specific fields, such as a medical practice, corporate regulations restrict business ownership to licensed professionals. If one spouse does not have a license, the court may award them the equivalent value of other marital assets instead of a physical share in the business.
You may decide to do a buyout of a shared business you care about. In Illinois, spouses can keep major marital assets by compensating their partner through asset offsets or structured payments.
Getting your fair share
Division of co-owned businesses is complicated, especially with your spouse. You do not need to go through the valuation and negotiation process alone. A legal professional well-versed in Illinois divorce law can help you safeguard your rights and ensure you obtain your fair share.