Going through a divorce in Illinois is rarely a stress-free experience. Often, much of someone’s divorce-related stress involves assets. Understandably, most people don’t want to lose significant assets to their former spouses. Some divorcing individuals have asset protection by owning a limited liability company (LLC).
You’ve likely read or heard news stories about a businessperson losing millions or billions of dollars after divorcing. Fortunately, a major advantage of owning a limited liability company involves separating your personal and business assets. Due to the nature of this business structure, owning an LLC means taking on personal asset liabilities. If a court concurs that your spouse has the right to your LLC, your assets should remain unaffected.
A buy-sell agreement
Another benefit of an LLC is its included provisions. One provision is a buy-sell agreement. This type of agreement can let a company’s partners step in to potentially buy out shares from former spouses.
Having a business-related trust
Protecting your assets before a divorce is also possible with asset protection trusts. For instance, you can establish this type of trust capable of holding ownership in your LLC. In this case, it would be harder than normal for your ex-spouse to go after your limited liability company. When a business is in an asset protection trust, this trust typically owns the business, not you.
One benefit of an Illinois divorce is that this state is an equitable distribution state. This means that Illinois courts don’t automatically split a married couple’s assets down the middle. Properly preparing for divorce could mean walking away from it with your most valuable assets.