Getting divorced is hard. On top of the intense emotions, there are many complex legal, logistical, and financial issues that must be worked out. The divorce process is even more challenging for business owners. You may be wondering: Is my Illinois business considered a marital asset? The answer depends on several factors—most importantly, when your company was formed. Here, our Chicago divorce lawyers provide a more detailed explanation of the most important things to know about business ownership and property division laws in Illinois.
As a starting point, it is important to understand that Illinois is an equitable distribution jurisdiction. In a divorce, Illinois courts are required to divide a couple’s marital assets and marital liabilities in a “fair” manner. To be clear, an equitable distribution may or may not be a 50/50 division of the property. A party’s non-marital property is not subject to equitable distribution in a divorce but may impact the Court’s determination of the equitable distribution of the marital property. A spouse has the right to keep full control over their separate non-marital property.
Businesses can qualify as marital property in Illinois. Under state law (750 ILCS 5/503(a)), marital property is broadly defined as all property, assets, and debts “acquired by either spouse subsequent to the marriage.” In other words, if you formed a business after the start of the marriage, it will likely be deemed marital property. As such, your spouse can claim his or her “fair” share of the value, which may or may not be an equal division.
A business formed prior to the start of a marriage may be considered separate non-marital property in Illinois—meaning one spouse can retain full ownership of it even through a divorce. That being said, there are some important complicated factors to keep in mind. Pre-marital separate property can sometimes become marital property in Illinois. If business and personal accounts were commingled or household funds were used to support the growth of the business, then a part (or all) of a pre-marital company could still be deemed a marital asset. Furthermore, the retained earnings held in a separate non-marital business may constitute marital property.
At Hammer Serna & Quinn, LLC, our Chicago divorce lawyers have the professional skills and family law experience to handle complex property division cases. We have consistently represented business owners and are well versed in the specific needs of business owners. If you have any questions about business assets/business ownership in divorce, we can help. Call us now or contact us online to set up your strictly confidential consultation. With an office in Chicago, we represent business owners in divorce throughout Northern Illinois, including in Evanston, Glenview, Oak Park, and Wheaton.
Call or email Hammer Serna & Quinn, LLC today to schedule a consultation.