No couple enters into a marriage expecting that it will end. Unfortunately, divorces happen and can be emotionally exhausting, stressful, and difficult. A couple facing divorce has many difficult decisions ahead of them, including what will happen to their assets and property. If they have children, they need to determine what custody, visitation, and support will look like. However, what can complicate the divorce even further is if one or both spouses own a business. Knowing if or how the business will be divided can create more questions than answers. Each divorce is unique and will have different outcomes depending on your circumstances. Working with our team of Will County Business Divorce Lawyer at Vahey Law & Mediation, LLC, can help you understand how the divorce laws will impact your situation and achieve the best possible outcome.
Dividing property in any divorce, including business ownership, comes down to how the property is:
These four steps apply to real estate, retirement benefits, and even investment accounts. Although a business will still be looked at through all four lenses, there are additional factors that must be considered. These can include deciding on ongoing management if both spouses work at the business, determining a value, and even determining income if one or both spouses are self-employed through the business.
While two spouses may be active in the business, the business still needs to be classified as marital or nonmarital property to determine the claim each spouse has on the business. While there are several considerations to make, the biggest contributing factors in classifying the business come down to a few key questions:
No matter the classification of the business, the income earned from the business will play a role in spousal maintenance or child support.
It is not uncommon for both spouses to work for the family business. However, it is easy to assume that a couple that is struggling in a marriage will likely struggle as business partners. While a couple may enter into a divorce process amicably, divorce cases can quickly become difficult, affecting business decision-making. If the couple is unable to continue the business successfully, then an important step, even before the divorce is finalized, is to determine who will continue to run the business while the other spouse is removed from the business. A court may make a determination if this process cannot be completed through mediation.
In addition to deciding who will continue oversight of the business through the process, there needs to be an agreement on who is going to control the business after the proceedings are completed. The removal of one spouse also means the removal of income, so it is likely that a settlement of spousal maintenance would need to be put in place. There are options for maintenance that do not just involve a payment from one spouse to the other. For example, arrangements may be made for the removed spouse to still receive a salary for a specified time. However, this option may not always be available if the money that would pay the salary is needed to replace the departing spouse with a new hire. The circumstances surrounding your business's needs are unique and should be handled with the specifics of your case.
Regardless of which spouse works at the business, if it is determined to be a marital asset, the value must be assessed to understand how the value impacts the divorce. When a business is assessed, it is usually done by a valuation appraiser who specializes in businesses. They will review the financial records, both present and historical, and will consider the current economy and the industry classification to determine a fair market value. While it may seem straightforward that a business that earns more money will be valued higher than a business that does not, there are several other factors that are considered in business valuation.
In most divorce cases that involve a business, both parties will have the business valued by their own independent parties. This can create disagreements between both parties that will need to be resolved through legal proceedings. In situations such as this, the knowledge and experience of a Will County Business Divorce Lawyer can make the difference in the outcome as they cross-examine business assessors. Because parts of the business valuation process are subjective, there are many opportunities to challenge the assessor, who must have the skill, knowledge, and evidence to stand behind their findings.
If the business is marital property, then the division of the property is generally 50% each. This is settled by the spouse who is keeping the business providing funds to the other spouse to buy them out of it. During the proceedings, a determination will be made that will establish a timeline for the payment and the manner in which the payment needs to be made. If the spouse who is keeping the business is unable to provide the other with the physical funds, there may be opportunities to offset the amount through other marital assets that the couple owns. If this still does not cover the portion owed, payment plans may be required.
A benefit of owning a business is the income that it produces. However, determining the income of a business owner is difficult as payments to the owner can take many different forms. Many business owners take regular salaries. Some may take periodic payments as the success of the business fluctuates, while others may pay part of their personal expenses as business expenses. All these situations are considered when deciding payments for child support or spousal maintenance. The determination for these is not just about the salary a person provides for themselves but also the benefits they receive as the owner of the business.
A: Divorce in Will County, IL begins with a petition to the court for a dissolution of marriage and is filed as contested or uncontested. From there, the non-filing party will be served and provided an opportunity to respond. The couple will then mediate the division of property, spousal support, or child custody. If they are unable to reach an agreement, litigation will proceed. The process takes a minimum of 30 days but could last a year or more.
A: Zoom information is located on the Will County Judicial Court website. Also available on the site is information regarding proper protocols and instructions for the sessions. However, arbitration hearings have returned to in-person effective April 2022.
A: To obtain a certified copy of your divorce decree, you will need to write to the Clerk of Circuit Court in Will County. Information can be found on the Judicial Court website or is available through the Illinois Department of Public Health website.
A: In 2022, the total filing fee is $603, with $364 to file the petition and $239 to file the appearance. Payments may be made in cash or money order. Personal or business checks are not allowed. This is in addition to any attorney fees that may be associated with your proceedings.
If you are facing a divorce in Will County, make sure that you have an divorce attorney on your side who has the knowledge and expertise to help you through the process. At Vahey Law & Mediation, LLC, our team is ready to help you through this difficult process. For more information on how our team can help, contact us today.
