How to Protect Your Business During Your Illinois Divorce
For many people, the American dream is realized through small business ownership. While owning your own business can be a fulfilling career, it can also lead to a difficult situation if you get a divorce. In any divorce, a business is a significant asset, and it will likely be subject to property division during your divorce.
In the state of Illinois, marital property (any property that was acquired during your marriage) is distributed in an equitable manner. This means that property is not necessarily split 50/50 -- it is split in a way that is deemed fair and equitable. Your business is likely one of your most valuable assets, both financially and emotionally, and you will want to understand how you can continue owning and operating it following the equitable division of property. Taking the following steps before you begin dividing your property may help you keep your business or minimize any losses you may incur.
Have Your Business Fairly Valued
Before you begin to negotiate anything, you first need to figure out how much your business is actually worth. You may be required to use a court-appointed business valuation professional, but you may also want to hire an outside professional to corroborate the valuation. This will allow you to know how much your business is actually worth so that you may continue dividing your property fairly.
Pay Yourself a Decent Salary
Though it may seem counterintuitive, paying yourself a suitable salary can actually help you out in the long run. If you choose to take a smaller salary and use most or all of the profits from your business to invest back into the company, these funds will be considered marital property, and your ex-spouse may be able to claim a larger share of business assets. Ensuring that you earn a salary will allow you to have the financial resources you need after your divorce.
“Pay Off” Your Ex-Spouse
This option may be unavoidable. If you started your business when you were already married to your spouse, or if your business significantly increased in value while you were married, your ex-spouse may be legally entitled to a portion of the business assets and profits. In order to retain ownership of your business, you may have to “pay off” your ex-spouse. If you are able to, you can use other assets or cash to compensate your ex-spouse for his or her interests in the business. If you do not have the financial resources to buy out your ex-spouse’s share, you may be able to arrange a payment plan to pay off your ex-spouse over time.
Do Not Lose Your Business -- Call a Will County Divorce Attorney Today
When it comes to property division during a divorce, it is all about compromise. This means both spouses will be required to make sacrifices. However, you should not have to sacrifice your ownership of a business that you have built. At Wakenight & Associates, P.C., we will provide you with trusted legal advice on how you can best protect your business during your divorce. Contact our knowledgeable Orland Park, IL divorce lawyers today -- the sooner you get in touch with us, the sooner we can help you. Call our office today at 815-458-5660 to schedule a free consultation.