Dividing a Business in a Divorce Settlement

Illinois family law attorney, Illinois divorce lawyer, goodwill of a businessAccording to the latest numbers provided by the U.S. Census Bureau, married couples share ownership 3.7 million businesses in this country. When couples who own a business together have a good working marriage, that positive relationship usually carries over into their business as well. But if the marriage begins to erode and the couple files for divorce, it can be disastrous for the business, especially when that business becomes part of the divorce settlement.

The assets of the business become part of the marital estate that will be part of the divorce settlement and are subject to property division, just like the couple’s marital home, personal bank accounts, stocks, etc., and can involve complex negotiations.

The first thing that needs to be done is to determine the actual value of the business. There can be a great difference of opinion on the value dependent on whether or not spouses share equal partnership in the business or not. If one spouse owns a larger share of the business, he or she will likely come up with a lower value of the business than the spouse who owns a lesser share. For this reason, it’s best to hire an independent appraiser to come up with the total value of the business.

It is also important to understand how local laws look at the “goodwill” of a business when determining its value. Personal goodwill is the skills, abilities and relationships with customer and vendors that an individual brings to a business. Enterprise goodwill comes from the business itself, as a single entity.

A decision will also need to be made on what each spouse’s role will be after the divorce. Whatever decisions are made, it is critical that each role is clearly defined in the final agreement in order to avoid disagreements in the future which could jeopardize the business.

If you and your spouse own a business and are considering a divorce, contact an experienced Aurora divorce attorney to make sure that your receive your fair share of the assets in the marital estate.

Share this Post : Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someone
This entry was posted in Aurora Family Law Attorney, Division of Property, Divorce, Divorce Finances and tagged , , , , , .

Comments are closed.

Logo Image 1444 North Farnsworth Avenue, Suite 307
Aurora, IL 60505
Phone: 630-409-8184
Facebook   Twitter   Google Plus   Our Blog