Is a Business Valuation Important in an Illinois Divorce?

 Posted on December 04, 2023 in Divorce

Divorce settlements lay out how any marital assets will be divided. Some assets are easier to divide and some are harder. One of the assets that can be complicated to divide is a business. If either or both spouses own a business, figuring out how it will be divided requires the consideration of many factors. If not done right, it could affect the future of the business. While there are several ways a business can ultimately be divided between ex-spouses, it is generally a great idea to do something called a business valuation. If you are considering divorce but are concerned about how it might affect the business you own, an experienced Kane County, IL, divorce attorney can advise you on how best to protect your interests.

How Can a Business Valuation Impact My Illinois Divorce?

Regardless of the size of a business and whether it is a family-owned business, medical practice, investment firm, house cleaning company, or any other type of business you can imagine, figuring out what will happen to your business after divorce can be a complicated challenge. In general, there are three ways to deal with business ownership in a divorce:

• Sell the business, and then each spouse can get their financial share of what the business was worth. If divorce costs have undermined your financial stability but your business is highly valued, or if you had an acrimonious split with your spouse, this might be the best option for you.
• Keep running the business together. You need to think carefully if this is what you want. Even if you split amicably with your spouse, you will need to be able to continue working together productively for your business to succeed. It is certainly a great option for couples who can manage, and they would simply need to draw up a new contract reflecting your newly individualized ownership arrangement. If you and your ex can maintain productive communication and you were both highly involved in running the business before your divorce, this could be a good option for you.
• One spouse buys the other out. In an arrangement like this, the other spouse will generally be given a portion of the marital estate with equal value to the business, making it less painful in terms of the loss of business interests. If one of the ex-spouses was very involved with the business and the other one never was, if the divorce had made it difficult to continue working together, or if market factors mean that it is not a good time to sell the business, this could be the right option for you.

Once you have decided which option suits you best, a business valuation is the next recommended step. This is because it will determine the value of the business, and that will help decide how to move forward. Knowing the value of the business is very important, whether you and your ex decide to run the business together, you want to take sole ownership, or you want to walk away and be compensated fairly in exchange.

Schedule a Free Consultation with a St. Charles, IL, Divorce Attorney

If you think divorce is in your future, but you are worried about what will happen to the business you own, a knowledgeable Kane County, IL, divorce lawyer will be able to use their experience in similar cases to offer you relevant guidance. We offer free consultations, so call Goostree Law Group at 630-584-4800 and let us get started on a plan to advocate for your rights.