Divorce is a complex and trying process. When it comes time to divide marital property, many couples find that they benefit from legal counsel to make that process easier; but a divorce can be especially tricky (and sometimes difficult or contentious) if one or both spouses own a business.
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If a spouse (or both spouses) owns a business during a divorce, it will generally require some additional work during the divorce
Professionals and business owners face a unique challenge during a divorce: preventing their spouse from taking control of a business started before or during marriage. Business ownership is a complicated sphere. You need to address it methodically and carefully during a divorce.
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If your spouse wants partial or complete control of your business, you’ll benefit from working with a business owner divorce attorney
Common Concerns for Business Owners Going Through Divorce In Naperville
Business owners in divorce may experience a range of concerns. Every scenario and divorce is totally unique, so the best way to ensure your questions are answered is to consult with a lawyer about your case. Some of the most common questions and concerns include:
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Determining whether the business qualifies as marital property
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Obtaining an accurate, independent valuation of the business
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Determining fair division of property
Does My Business Qualify as Marital or Non-Marital Property In Joliet?
Under Illinois divorce law 750 ILCS 5/503, there are four circumstances when your business will be legally considered non-marital property. This means that your spouse cannot claim any share of the business. A business qualifies as non-marital property if:
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You owned all or part of the business before marriage
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You acquired or created the business in marriage by using only a gift or inheritance
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You acquired or created the business in marriage using assets that were your personal property before marriage (or using assets from a gift or inheritance)
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You have a pre- or postnuptial agreement that defines the business as your sole and separate property
Sometimes, though, businesses do qualify as marital property. This occurs when:
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You created the business in marriage (even if it’s only incorporated in your name)
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You invested savings accumulated during marriage in the business (even if the savings were solely yours)
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You and your spouse both invested non-marital property in the business
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You owned the business prior to marriage, but transferred it into co-ownership
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You took out a home equity loan on your marital home to fund the business
Determining whether a business qualifies as marital or non-marital property can be very tricky. There are lots of steps involved in the process. It’s important to work with a legal professional who can give you accurate advice and answers while you divorce with a business.
Protecting Your Business In Case of A Divorce
Here’s some good news: there are a handful of steps business owners can take to secure their assets before or during divorce. For example, you can:
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Form an LLC, trust, or corporation: To separate your business from yourself as an individual
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Sign a prenuptial or postnuptial agreement: Prenuptial agreements are signed prior to a wedding; they detail what happens to assets, property, and income in the event of a divorce. You can also get a postnuptial agreement (which serves the same purposes) after marriage
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Pay yourself a salary: When you pay yourself a competitive salary instead of just reinvesting in your business, it helps prevent confusion; it’s one way to show that finances between the company and your household (shared with your spouse) are separate
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Hire a qualified divorce lawyer: We always recommend finding a seasoned divorce lawyer who can help you with your case