Menu
Search

Divorce and Business Ownership: Will I Lose My Business in Divorce?

Home
Blog
Divorce
Divorce and Business Ownership: Will I Lose My Business in Divorce?

Divorce and Business Ownership: Will I Lose My Business in Divorce?

For many couples going through a divorce, the thought of having to dissolve and sell one spouse’s business is a harrowing one. While the Illinois Marriage and Dissolution of Marriage Act mandates that everything is subject to equitable division, there are various factors that will make this division more complicated, such as ownership of a business prior to marriage.

Yet, while it is entirely possible that the business and/or a portion of its income can be viewed as matrimonial assets to be divided, there are ways to engage in forward thinking to protect your business before and while you are married, as we discuss below:

Shared Ownership with External Party/Parties

One of these options is to share ownership of your business with a third party outside of your marriage. A business that is co-owned by outside parties or shareholders is less likely to be at risk in the event of divorce, as courts will be more hesitant to dissolve and damage external shareholders’ interests.

Partnership or Shareholder Agreement

Even if you do co-own a business with your spouse, having a partnership or shareholders agreement in hand can help protect the interests of every party involved. These agreements can also contain clauses that help to prevent an ex-spouse from sharing confidential information in an attempt to compete.

Insurance Policies

You should also have a good insurance policy in place. A whole-life insurance policy can be liquidated to purchase a business outright from your spouse in order to prevent its dissolution.

Avoid Intermingling

You can also work to avoid intermingling personal and business assets during your marriage by keeping these separate and avoiding using marital funds to support the business; be careful, as this includes using the family home to borrow for the sake of the business.

Prenuptial Agreements

Finally, perhaps the most important tool you have to protect your business interests before, during, and after your marriage is a prenuptial agreement. Prenuptial agreements can contract to anything that is legal, including provisions that state that your business belongs to you alone and remains with you in the event of divorce. This—or a postnuptial agreement, entered into during the marriage if you did not enter into a prenuptial agreement—is the best way to provide peace of mind when it comes to ensuring that you will hold onto your business.

Contact Our Experienced Rolling Meadows Divorce Attorneys

If you are a business owner concerned about protecting your business throughout your marriage, contact our experienced Rolling Meadows divorce and business attorneys today for a free consultation to find out how we can help.

SHARE THIS POST
facebooktwittergoogle

Categories

Archives

Testimonials

Providing Legal
Solutions In An
Equitable &
Cost-Effective Manner

Related Articles

17Aug

Driving is an immense responsibility, and driving safely requires a motorist’s full concentration – with no room for distractions. Unfortunately, far too many drivers are far too susceptible to distracting…

28Jul

If you are the primary custodial parent, which means that your children live primarily with you, in the State of Illinois and you are planning on moving out of state…

07Jul

If you are divorcing, you may have questions about whether it will affect your child’s ability to attend college and if the court will address the matter of paying for…

Need Our Help?

Schedule Your Free Consultation Today

Contact Us

Get Your Free Consultation!
  • 13 minus 6 =
  • This field is for validation purposes and should be left unchanged.
Call Now Button