DuPage County business asset divorce attorneyAmong the many issues that need to be decided during a divorce is how to divide the couple’s marital assets and debts in an equitable way between the two spouses. This usually involves the division of real estate property, furniture, vehicles, bank accounts, retirement accounts, stocks, and other items of value. However, when one spouse owns a business or the spouses own a business together, that business is also likely to be an asset for which ownership must be determined during a divorce.

Determining the Value of a Business

The first thing to understand is that both the rights to the business and the value of the business must be considered to determine whether it is a marital asset and how it will be handled during the property division process. Under Illinois law, a marital asset is an asset that is acquired by either spouse during the marriage, with limited exceptions. This generally includes a business that was started or acquired during the marriage.

There are different ways to value a business, including approaches based on market value, assets, and expected future earnings. Each of these methods may be used for different purposes, and you and your spouse may have trouble agreeing on the value of the business, so it is often a good idea to work with a professional business valuator and seek multiple valuations.

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DuPage County divorce lawyerThe division of property in most divorces is relatively straightforward, but when managing a high-asset divorce or a complex divorce, the task of dividing property and assets can get extremely complicated. The diversity of assets as well as the sheer value of each item can make these cases feel less like ending a marriage and more like settling a business dispute. In some situations, this is exactly the case — if one or both spouses own a business, the law requires it to be included in the division of property process. Whether you are a silent partner, a proactive founder and president, or anything in between, your spouse may be entitled to some of the value derived from your business upon divorce.

How Your Spouse Stakes Claim in Your Business—and How to Avoid It

To determine just how much that business is worth, both sides of the divorce case will typically conduct their own business valuation to calculate the precise monetary value of that business. If both sides cannot agree on the business’s value as well as what each spouse is owed from that value, the case might require additional business valuation litigation. In that sense, it certainly does become more involved than a typical divorce case. 

If you are the person who did all the work in creating, funding, and running the business, you may be wondering how your spouse can be entitled to any of its value in the divorce. Illinois is an equitable distribution state and recognizes separate property and marital property. Depending on the details of your business, your spouse may or may not be eligible to receive a cut.

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