If you and your spouse are seeking a divorce, there are numerous issues you will need to work together to resolve or go to court in order to obtain a decision from a judge. For some couples, reaching an agreement is easy. For others, especially couples in high-asset marriages or those who jointly own family businesses, reaching an agreement about property division can prove extremely trying. If you and your spouse are divorcing and wondering to whom the family business will be assigned, here’s a look into what you need to know.
Illinois Property Division Laws
Before talking about the specifics of dividing a family business, it’s best to familiarize oneself with Illinois’ property division laws. In Illinois, the state requires that all marital property is divided amongst spouses in a manner that is considered “equitable.” Marital property generally includes property that was acquired during the course of the marriage, but excludes property acquired by gift or legacy, property acquired prior to the marriage, and property excluded from division due to a valid agreement entered into by the parties, such as a pre- or post-nuptial agreement.
Is Your Family Business Separate Property or Marital Property?
Based on the above, the first thing that you need to know is whether the family business in question is marital property or separate property. If the business was given to you or your spouse via gift or inheritance, or was acquired before you entered the marriage, then it is separate property and is not subject to division. Otherwise, it is likely marital property and will be subject to equitable division.
How Will it Be Divided?
There are a few different ways to divide a business in a divorce. Examples of this include:
- Selling the business and splitting proceeds;
- Each party continuing to own their half of the business and running the business together;
- One spouse buying out the other spouse’s shares/business stock; or
- One party keeping the business in exchange for giving up something else of equitable value, such as the family home, vehicle, or/and investments.
It is strongly recommended that you consult with a professional who can determine the value of the family business and its expected increase or decrease in value over time.
Call Our Divorce and Property Division Lawyers Today
At the law offices of Fay, Farrow & Associates, P.C., our divorce and property division lawyers understand how frustrating, emotional, and confusing dividing property in a divorce, especially a family business, can be. When you need an advocate who can explain to you your legal rights, you need our family law attorneys.