Business Owners & Divorce

Divorce can be challenging, especially for business owners. Beyond the emotional toll, there are unique legal and financial hurdles to overcome. A business isn’t like other assets—it requires careful thought about its operations, value, and ownership. At SLG Family Law, we help protect what you’ve built and guide you through the process with clarity and confidence.

Marital vs. Non-Marital Business: Why It Matters

The first step in protecting your business is determining whether it’s classified as marital or non-marital property under Illinois law. This distinction affects how your business will be treated during the divorce.

Non-Marital Business

A business may be considered non-marital property if:

• It was started before the marriage.
• It was inherited or gifted to you individually.
• A prenuptial agreement excludes it from marital property.
• Marital funds weren’t used to grow or sustain it.

Marital Business

A business may be classified as marital property if:

• It was started during the marriage.
• Your spouse contributed labor, financial support, or other resources.
• Marital funds were invested in the business.
• Both spouses actively participated in its operations.

Correctly identifying the classification of your business is vital. Missteps here could leave your business exposed to unnecessary division.

Valuing Your Business

If your business is classified as marital property, the next step is determining its value. Courts often rely on professional valuations to assess its fair market worth, which plays a key role in dividing assets.

At SLG Family Law, we work alongside appraisers, forensic accountants, and financial experts to provide a complete and accurate valuation.

Valuation Methods

Valuing a business involves:

• Reviewing financial records like income statements, tax returns, and balance sheets.
• Investigating tangible assets such as equipment, inventory, and property.
• Evaluating liabilities, cash flow, and earning potential.

Common valuation methods include:

• Asset-Based Approach: Calculates the business’s value by subtracting liabilities from assets.
• Income Approach: Estimates value based on earning potential.
• Market Comparison: Compares the business to similar companies in the industry.

A thorough valuation is critical to reflecting your business’s true worth during discussions.

Dividing Business Assets

Once your business is valued, there are several ways to divide its assets:

• Buyout: One spouse purchases the other’s share, allowing the business to continue without disruption.
• Co-Ownership: Both spouses retain ownership, which works best with strong agreements and cooperation.
• Asset Liquidation: The business is sold, and proceeds are divided. This is often a last resort, as it can diminish value.
• Offsetting Assets: One spouse keeps the business, while the other receives equivalent marital assets, such as real estate or retirement accounts.

We’ll evaluate the best approach for your situation, prioritizing your interests and long-term goals.

Recognizing Spousal Contributions

Even if your name is solely on the business, Illinois courts may consider your spouse’s contributions, which could include:

• Direct involvement, such as labor, management, or bookkeeping.
• Financial support during the business’s early stages.
• Indirect contributions like maintaining the household or raising children while you focused on the business.

Understanding how these contributions may affect the division of assets is key to protecting your ownership.

The Role of Prenuptial and Postnuptial Agreements

Prenuptial and postnuptial agreements can significantly impact how business assets are handled in divorce. If you have an agreement, we’ll carefully review its terms to confirm it is enforceable and aligns with your objectives.

If no agreement exists, we will develop strategies to protect your business and secure your financial future moving forward.

How SLG Family Law Can Help

Divorcing as a business owner is complex, but you don’t have to handle it alone. At SLG Family Law, we bring both legal experience and financial knowledge to the table, offering:

• Strategic Planning: Tailored approaches to protect your business and minimize disruptions.
• Thorough Documentation: Detailed reviews of agreements, corporate structures, and financial records.
• Negotiation & Advocacy: Skilled representation to secure fair outcomes that reflect your contributions.
• Tax & Financial Guidance: Advice to address the long-term impacts of your settlement.

Protect What You’ve Built

Your business represents years of dedication and hard work. At SLG Family Law, we know how important it is to defend what you’ve created. With our support, you can protect your company’s value, minimize courtroom conflict, and help you remain in control of the business you’ve built.

Contact SLG Family Law today to schedule a consultation and learn how we can protect both your business and your financial future.