When you own and run a business, it takes a substantial amount of time, effort and mental bandwidth to keep things running during the best of times. But during a divorce, things become even more complicated. Here are some things to keep in mind if you’re going through this in Illinois.
Can the company survive the divorce?
For business owners who find it’s time to end their marriage, the biggest question is often whether they will lose their companies altogether. The good news is that’s usually not the case. Most of the time, the court will try to inflict as little damage as possible on companies.
If the company was started after you were already married, it counts as marital property. This is still true even if your partner holds no ownership of any part of the business. And if the company is entirely your property, your partner might have a claim against the amount that the organization’s value has gone up throughout your marriage.
The standard of value
It’s common for a couple that’s getting a divorce to disagree about countless things, and the value of a company is no exception. It often takes a professionally trained business appraiser to accurately assess the standard of value before an appraisal can be carried out. Through the standard of value, a series of hypothetical conditions are used to set the value.
The ease with which you can establish a fair value for the company depends largely on the complexity of your business model. The standard of value can be based on assets, market value and income. However, these three main approaches can yield widely disparate results.
It’s important to keep in mind that if your ex-partner works for the company but doesn’t have any ownership of it, he or she might try to do things that harm the value of the business asset in an act of retaliation. This can impact your future source of income.
Courts generally try to impose as little damage as possible to businesses in a divorce, but you should still bear in mind that it will be considered marital property. This inevitably tends to make your business a key factor in your financial analysis as you go through the legal process of divorce.
