If you own a business and are considering a divorce, it is important to choose your priorities carefully. While this may come as a surprise, the law typically classifies businesses as personal property, meaning that your spouse may have a legitimate claim to a portion of your business or its value.
If you want your business to survive your divorce, you must build your divorce strategy with this goal in mind. Otherwise, the business that you own may not make it through your divorce. With a strong, well-planned divorce strategy, you can make wise compromises while keeping your rights and priorities protected until your divorce is final.
Check your prenuptial agreement
If you have a prenuptial agreement, it may include protections for your business — if you included them when you created the agreement. With proper planning, courts typically allow a business owner to separate their business from their marital property, but this is not automatic. Be sure to review your prenuptial agreement to understand exactly what it does (and does not) protect.
If you do not have a prenuptial agreement in place, you may still have some defensive options for protecting your business.
Keep your finances separated
In some cases, you may be able to claim your business as separate property, but only if you demonstrate that your spouse and personal finances remain separate. This separation gets weaker and weaker if your spouse has an active role in the business, or if your personal finances and business finances intermingle.
Understand the value of your business for fair negotiations
If you believe that your spouse has a strong claim on some portion of its value, then you need to to know what it is worth. A professional business valuation examines all sides of your business and provides both spouses with a clear picture of the business as a complex asset.
Once you understand the true value the business, you can negotiate a fair settlement and find a path forward. This may include offering your spouse other assets to offset their claim on the business, or possibly setting up a payment plan to compensate them over time.
Build a strong divorce strategy if you want your business to weather the storm. A strong divorce strategy keeps you focused on what truly matters so that you have the tools and resources to rebuild once your divorce finalizes in Illinois. This storm will not last forever, and you can begin planning the season now.