Divorce for Business Owners in Chicago
One of the most contentious aspects of any divorce is the division of assets. However, the already complicated process becomes even more so when there is a business involved. A business is considered a marital asset, and as such, needs to be divided equally amongst the divorcing party. While this may seem simple in concept, valuing a business and then distributing shares equally is anything but simple when you take into consideration the value of the equipment, accounts receivable, accounts payable, third party ownership, and dozens of other factors.
At Arami Law Office, we cannot promise that your divorce will be easy, but we can promise that our Chicago divorce lawyers will provide the unwavering guidance and support you need to make it through the process as quickly and painlessly as possible.
When Both Spouses Own the Business
When both spouses own the business together, divorce becomes more complicated than what it already is. In addition to settling their differences, dealing with custody issues (if applicable), and dividing their non-business assets, they know how to maintain a professional relationship until they can figure out the best way to proceed. Typically, couples that are also business partners opt to close their business, sell the assets, and split the profits. Others, however, allow one spouse to buy the other out. Very rarely does a divorcing couple choose to remain in business together.
It becomes more complicated, however, when other co-owners or partners are involved. When other people have ownership of the business, their needs must be taken into consideration as well—especially if the other owners are family members or investors.
To prevent complications, it is always suggested that any couple that goes into business together should have a written agreement that details precisely how the business should be run in the event of a divorce, or how to dissolve the business if necessary.
When One Spouse Owns the Business
It is much more common for the business in question to be owned by one spouse and not both. However, that doesn’t make matters any less complicated. In this scenario, the question turns from “What do business ethics dictate?” to “What constitutes as marital property?” For instance, if one spouse spent the majority of the marriage building a multi-million dollar empire, should the other spouse be entitled to a percentage of the shares? And if so, how much?
Illinois is an equitable distribution state, meaning that marital property does not necessarily have to be divided equally, it just needs to be divided fairly. In the case of the business, the judge will consider how much of a role, if any, the non-owner played in making business ownership a possibility. For instance, if the non-owner helped run the books, took care of the children while the business owner put in late nights, weekends, and early mornings, and contributed part of his or her income to get the business off the ground, the judge might award ample share of the business to them. On the other hand, if the non-owner had no role in the business’s success whatsoever, the judge might see no reason to grant them any share.
With that in mind, the judge is not likely to grant the other spouse partial ownership; rather, they will have the business valued and order the spouse-owner to pay the other spouse his or her due share.
It is also important to keep in mind that just because the spouse-owner had ownership of the business prior to getting married does not mean that the business is not marital property. Marital property is considered any income sources that contribute to the family’s expenses, which a business is.
Consult a Chicago Divorce Attorney
If you want to file for divorce or already have, and if you are unsure what is to become of the family business, reach out to the Chicago divorce lawyers at Arami Law Office for advice and aggressive legal representation. We will help you achieve an equitable resolution that is in the best interests of you and your loved ones. To speak with a knowledgeable and experienced attorney, contact us today online or by phone at 312-212-1399 to set up your free initial consultation.
We can meet with you at our office, or discuss your case with you over the phone. We pride ourselves in our accessibility and make certain to help each and every client in a timely manner.