Is My Spouse Entitled to Partial Ownership of My Business?

There is nothing simple about divorce. The high stakes and the revved-up emotions help to ensure that this is true. However, few things complicate the division of your marital assets (an already-complicated divorce term) like business ownership does. If you own a business and are facing a divorce, don’t delay discussing your concerns with a dedicated Joliet divorce attorney who has considerable experience successfully handling these challenging cases. 

Illinois: An Equitable Distribution State

In Illinois, any assets or properties that you acquire while you are married are considered marital assets – the value of which must be divided equitably (or fairly) in the event of divorce. This means that if you started your business while you were married, your spouse is almost certainly entitled to his or her equitable share of the business – or something else of equal value. If this is the situation you find yourself in, obtaining a business valuation that you are both willing to sign off on is probably where you need to start (under the careful guidance of a skilled divorce attorney).

Separate Property

If you owned your business prior to marriage and kept it separate throughout your marriage, it will remain your separate property, but this is generally more complicated than it sounds for all the following reasons:

• Keeping an asset strictly separate over many years of marriage can be exceptionally challenging, and your spouse is very likely to challenge its separate nature regardless. 
• Any increase in the value of your business will likely be considered a marital asset.
• If your spouse worked at the business, it could blur the line between separate and marital. 
• If you ran the business but did not pay yourself the market rate, it may translate to marital assets making up the difference. 
• If you used marital assets to help grow your business, any claim of the business being a separate property may be lost.

Protecting Your Business

There are steps you can take early on to help protect your business in the event of divorce, including:

• Defining your separate ownership of the business in a prenuptial agreement
• Setting up a postnuptial agreement that addresses the separate nature of your business and that serves to expedite the process of property division if the marriage does end in divorce.
• Setting up your business structure in a manner that specifically addresses the issue of how the divorce of a business partner will be handled.

Suffice to say that business ownership in a divorce is nothing if not complicated, and you need an experienced Joliet divorce attorney in your corner. 

An Experienced Joliet Divorce Attorney Can Help

The trusted Joliet divorce attorneys at Sabuco Beck, P.C. have a wealth of experience helping clients like you protect their business assets throughout difficult divorce proceedings. Our fiercely loyal legal team has the keen legal insight you are looking for, so please hesitate to contact us for more information today.