Category: Family Law
So, worst has come to worst and you’re getting a divorce. And if that isn’t messy enough, you started a business while you were married, and you learned it’s classified as Illinois marital property. You have questions, and O. Long Law has answers. The times ahead are going to be hard, but they don’t have to be impossible.
In this blog post, you’ll learn more about:
If you have questions after reading this blog post, call O. Long Law. Our founding attorney has years of experience as a business litigator, making our law firm skilled in developing marital settlement agreements involving family-owned businesses, even if you own a business with your spouse. Initial consultations are free.
Before we discuss how family-owned businesses are split during a divorce or as part of a marital property settlement agreement, it’s important for you to have a basic understanding why they’re split the way they often are. A prime factor to consider is capitalization of earnings; that is, the value of your business is dependent upon the money made by an investor or owner―in this case, you and possibly your spouse. Even if your spouse doesn’t own the business, the fact that it was started during the marriage makes it Illinois marital property. So, it is a family-owned business. And it gets split as part of the divorce. So, it is important to determine its value.
Value of a family-owned business can be determined in several ways, but it can also depend on the type of business. An IT business is often based on knowledge. Whereas a family-owned restaurant includes equipment that serves customers (as well as knowledge). There can be liabilities and challenges that must be considered as well. Fair market value may also be a consideration as well. The value to the buyer may also be considered. Sometimes professionals are brought in for the purpose of valuation, depending on the age and type of business.
When it comes to the divorce or the marital property settlement agreement, how will the business be divided? The split will largely be determined by what each spouse invested into the business. In the eyes of Illinois law, any business started in a marriage is considered marital property: it belongs to the marriage, not to any one spouse. Even if your spouse was not invested, if your business was started in the marriage, it is subject to division in divorce.
Of course, there are numerous ways the business could be divided. One spouse could buy out the portion of the other spouse, resolving the possibility of a split entirely. The business could be sold, and the profits split between you and your spouse.
If you don’t see any of the above as valid options and want to protect your business, you’re going to need an aggressive and knowledgeable lawyer on your side. O. Long Law is here to help.
But what if you’re starting a business and you’re still married? Is there anything you can do now to possibly protect yourself in the event of a divorce? There is a legal document known as an Illinois post-nuptial agreement. Here’s what you should know.
Now you’ve learned a little about what a divorce might mean for your business. You find yourself asking: “How do I keep my business from being split if I start one while I’m married?”
As we discussed earlier, if your business was formed during your marriage, the Illinois court will consider it as marital property. As such, the only way to prevent it from being split between you and your spouse is to enter into an Illinois post-nuptial agreement with your spouse.
Now, what is a post-nuptial agreement? Similar to a pre-nuptial agreement, a post-nuptial agreement dictates what happens to a married couple’s assets and property in the event of a divorce. A pre-nuptial agreement is entered into before a marriage, while a post-nuptial agreement is entered into during a marriage.
If you founded your business in a marriage and want to keep what you worked hard to create from being split in the event of a divorce, a post-nuptial agreement is a great path forward. O. Long Law will fight for you and your business by drafting a post-nuptial agreement to protect it.
If you think filing a post-nuptial agreement is the best path forward, you owe it to yourself and your business to get started as soon as possible. Don’t want your assets split? Trust us. Get in contact with O. Long Law today. You can visit our website for a free 30-minute consultation. Don’t hesitate―we’re here to help!