Will I Lose My Business in an Illinois Divorce?

 Posted on April 11,2024 in Asset Division

One of the painful realities of the divorce process is that you lose not just a spouse but can also lose financial assets. Asset division, which is the area of divorce law that deals with dividing a couple’s assets, is very complex and should be handled by a skilled divorce attorney.

The general rule under Illinois law is that any property or asset that was acquired by either spouse during the marriage should be equitably split with the other spouse upon divorce. There are exceptions to this, such as:

• Inheritance

• Gifts

• Property acquired by using pre-marital assets as collateral

If you have a business, it may count as marital property depending on certain factors.

Is My Spouse Entitled to My Business?

There are a few cases in which your spouse may be entitled to part of your business. For example:

• If you started the business during the marriage

• If you owned the business prior to the marriage but your spouse contributed significantly to the business

• If you owned the business before the marriage but it became commingled with your spouse’s assets

If any of the above is true, then it is likely that you may be forced to split your business with your spouse in a divorce. An experienced attorney can help you understand if your spouse is entitled to your business and, if so, how much.

But to determine that, your business will first need to be valued.

How Will My Business Be Valued?

Every business has a value, and yours can be determined in one of three ways:

• Market-based approach

• Asset-based approach

• Income-based approach

In a market-based approach, the business will be valued by looking at the value of similar businesses that were sold. 

In an asset-based approach, the business will be valued by looking at the tangible and intangible assets of the business. This means any real property owned by the business, as well as any intellectual property, will be part of the business valuation.

An income-based approach is the most common. In this method, the business will be valued by its revenue. A forensic accountant will look at the profit and loss balance sheets for the business and try to assess what the business’ revenue will look like in the future.

Contact a DuPage County, IL Divorce Attorney

Except in certain circumstances, you are not likely to lose your entire business in a divorce. You may, however, be left with only a portion of it. It is therefore important to first consult with a qualified Wheaton, Illinois divorce lawyer who can walk you through the different possibilities. Get a free consultation with any one of the experienced attorneys at Goostree Law Group by calling 630-364-4046 today.