Illinois is a state full of MANY hard-working people who depend on family businesses. Protecting a family-run business is crucial because it is what supplies the family’s needs. Unfortunately, a divorce is a life-changing event that can jeopardize the potential future of a family-owned business. If you are in the midst of a divorce, there are some measures you can take the protect yourself and your business.
Understanding equitable distribution
You may assume that divorcing means giving up half your business to a former spouse. However, Illinois is an equitable distribution state. This means that a 50-50 division won’t necessarily happen. Instead, two parties in a divorce need to only walk away with an equitable share of a company.
Buying out a spouse’s share
If a court determines that your ex-spouse has an ownership stake in your business, that doesn’t mean they must involve themselves in this company. Instead, one party can buy out the other party’s ownership interest in a company. This arrangement can cause you and your family business to take a financial hit. However, it might be a better option than having your former spouse involved in a family-run business.
Co-running a family-owned business
Sometimes, protecting family businesses can mean setting aside personal feelings. If you and your ex-spouse have led a shared company to success, having one person kicked out can negatively affect this formerly shared business. Instead, it may be best for you and your former spouse to continue running a family business rather than selling something you both worked hard to build.
Making an enticing trade
Just because a spouse has a rightful stake in your family’s business doesn’t mean that trades aren’t allowed. For instance, you may have non-business-related assets, such as investments or properties. If so, it’s worth proposing a trade where your former spouse trades their equitable share in a family-run business for other valuable assets.
Most people naturally find divorces to be difficult situations. However, doing your best to work with your former spouse can ensure a successful future for your business.
