Most Americans are familiar with the basic concept of property division in an Illinois divorce: the court will attempt to divide the property between the two divorcing spouses in a fair and equitable manner. But a business is a much more complicated asset to divide than, say, the value of a car or the value of a home. What is more, the value of a business on any given day may fluctuate and, over time, can vary widely from its value at a previous point in time.
If you or your spouse has a business, how will an Illinois courts treat this business during your divorce?
Is the Business Marital Property?
The first question the court will ask is whether the business itself is “marital property.” If the business was started before the marriage and its profits and assets have been kept completely separate and distinct from other marital assets, then the business will most likely not be regarded as marital property. This means that the business will not be subject to the division of assets that normally occurs as part of an Illinois divorce. Conversely, if the business is started during the course of the marriage, if the business deposits or withdraws funds from a joint personal account, or if the profits of the business are used to pay the marital expenses of the couple, then a court may choose to view the business as marital property and thus subject to division.
How Does an Illinois Court Value My Business?
If the parties agree as to the value of the business in question and the court is satisfied that the value agreed to by the parties is reasonable, a court may accept that value without any further inquiry. More often than not, however, the parties will not agree on the business’s value and the court will need to determine the business’s value.
In order to determine the value of a business, the court may employ a professional appraiser who will attempt to determine a “fair market value” for the business. This would be the business’s value in terms of present dollars and can take into account the business’s expected future income, its present assets and capital, and other facts and factors about the business and its operation. If the business has “goodwill” – i.e., a name or reputation that makes it valuable to the owners – that goodwill can also be taken into consideration.
Contact a DuPage County Property Division Attorney Today
When you and your spouse are divorcing and either of you have a business, you need experienced and knowledgeable counsel to ensure that business is properly classified, valued, and then handled accordingly. At the Abear Law Office, we can help you determine if you or your ex-spouse’s business is a marital asset and, if so, what value should be assigned to it. Contact our skilled DuPage County divorce attorneys for experienced assistance today.