Is Your Business Subject to Division in Your Divorce?
If you own and run a business, you have probably invested countless hours and significant sums of money into making your dream a reality. You follow all federal and state licensing guidelines, you comply with employment regulations, and your company passes necessary code and health inspections with flying colors. Outside of a serious, unforeseen change in the economic climate or a natural disaster, it would seem that nothing could deny you the fruits of your labor and take your business from you. Nothing, that is, except possibly a divorce. Depending on the way in which you invested in your business and when, your company could be subject to division during the divorce process.
Marital and Non-Marital Property
Ownership interest in a business is considered an asset just as a physical item is considered an asset. While owning a business is certainly more complex, the law regarding divorce is very clear about what constitutes marital property for the purposes of divorce. The Illinois Marriage and Dissolution of Marriage Act provides that the marital estate consists of all property, including assets and debts, acquired by either spouse during the marriage. There are limited exceptions, such as gifts and inheritances, but interests in a business are not among them.
The provisions in the law mean that if you started your business after you got married and you own 100 percent of the company, the entire company is likely to be considered a marital asset. If you founded the company prior to your marriage but continued to earn money and invest those earnings back into your company, the value of your interests that accrued during the marriage will likely be included in the marital estate.
There are, of course, many variables that could impact how much, if any, of your company should be considered marital property. The situation can become even more confusing if you share ownership with a partner and if your company has shareholders. In these types of cases, it may be appropriate to seek the assistance of a financial professional who can analyze your business arrangements and determine the portion that may be subject to division.
At Kezy & Associates, we understand that business owners may face complicated challenges during the process of divorce, and we are equipped to provide the professional guidance you need. If you are concerned about protecting your business in divorce, contact an experienced Orland Park divorce lawyer. Call 708-518-8200 for a free consultation today.