It is a well-understood reality of divorce that the process generally includes considerations for the division of marital property, assets, and debts between the parties. In fact, for many couples, coming to an agreement over the allocation of assets is among the most challenging aspects of the entire case. While some of the difficulties lie in determining who should get what, others arise in establishing whether a particular asset is even subject to division under the law. One of the most common examples of this may be a business owned by either of the divorcing partners.
In the state of Illinois, like many others, property and assets acquired during a marriage by either spouse are generally considered to be marital property and are subject to division upon divorce. The law provides for certain exceptions, such as gifts, inheritances, and other specified assets that are exempt from property division considerations. Illinois law requires that the assets and debts of a couple be distributed equitably, not necessarily equally, according to the circumstances of each spouse, the duration and lifestyle of the marriage, and other factors.
Property and assets that were owned by either spouse before the marriage, including a business, may be considered non-marital property. Such a determination often depends upon the impact that such ownership had on the spouses, and both spouses’ contribution toward the business during the marriage.
Determining the Status of a Business
When one spouse starts a business, or invests in significant ownership of a company, prior to getting married, such ownership may be kept as a non-marital property in many situations. This is particularly true if the arrangements are documented in a valid prenuptial agreement. Even without such an agreement, however, the ownership of the business often remains non-marital property, while the spouse’s income generated by his or her efforts within the business is generally part of the marital assets. The business itself, as it was owned prior to the marriage, is not necessarily subject to division.
There may be situations, however, in which marital property is invested in the previously-owned business. For example, the owning spouse may use a portion of his reported income to make capital improvements to the company. In many such cases, the business may still remain non-marital property, but the value of the invested marital assets will need to be offset by other allocations during the property division process.
Find Professional Legal Assistance
The divorce process can present a number of challenges to any couple and the help of a qualified attorney can prove to be invaluable. If you are considering divorce, contact an experienced Kane County divorce lawyer today to discuss your options. We offer a free initial consultation so that you can begin working toward a more positive future.