Owning a business can be an extremely satisfying and profitable venture. It can also be a tremendous amount of work, often requiring years of dedicated effort before you begin to the see the financial fruits of your labor. If you own a successful company, you should be very proud. Like most business owners, you have probably taken a number of steps to protect your business: you most likely have insurance policies and financial reserves in case of an emergency. However, you may also want to consider protecting your company against the possibility of divorce, especially if you are planning to get married after the business is already established. A prenuptial agreement can provide the security you need and the peace of mind you deserve.
Complex Property Laws
Illinois law regarding the division of property in a divorce seems relatively simple. Any property acquired by either spouse during the course of the marriage is considered marital property, with very limited exceptions for gifts and inheritances. Assets that were acquired before the marriage are not marital property and, therefore, are not subject to division should the spouses divorce. Business ownership, though, tends to blur the line between marital and non-marital property.
If you owned the business before you got married, the company itself is a non-marital asset. The income that you take home during the marriage, however, is no different than any other paycheck and is martial property. What happens, then, when your business grows in value during the course of your marriage? While the law provides that any increase in the value of a non-marital asset is also non-marital, a savvy divorce attorney could try to convince the court otherwise, depending on the structure of the business.
Deciding in Advance
One of the keys to a successful business, as well as to a successful marriage, is eliminating the fear of the unknown. Regarding the possibility of divorce, this can be done by sitting down with your spouse and your respective attorneys and negotiating a prenuptial agreement that addresses the specifics of your company. While it may not seem particularly romantic, you will each have a much better understanding of the overall situation. Your prenuptial agreement could provide that your spouse receives other considerations, such as cash, in place of business interests, or he or she could waive interest in the business altogether. As long as the agreement is voluntary, equitable, and completed with full disclosure of all assets and liabilities, it is likely to withstand any challenges down the road.
If you own a business and are thinking about getting married, contact an experienced Kane County family law attorney to discuss your options for a prenuptial agreement. We will help you make the best decisions for your company as well as for your marriage. Call 630-377-7770 to schedule a free, no-obligation consultation at Bochte, Kuzniar & Navigato, P.C., today.