How a Business Valuation Could Help Uncomplicate Your Illinois Divorce

 Posted on April 05, 2022 in Divorce

There are many complicated aspects to a divorce, including dividing shared marital assets, determining spousal support payments, and potentially agreeing upon child custody. These topics can be contested between partners, considering the critical nature of finding an equal balance between assets following a divorce. When one, or both, spouses are business owners, determining the value and ownership of the practice adds another layer of complications to a divorce proceeding. However, there is a way to uncomplicate the division of business assets in an Illinois divorce. Obtaining a business valuation is an excellent advantage if you are a business owner preparing for a divorce. 

What is a Business Valuation?

When a spouse undergoing a divorce owns a business, there may be complications in determining ownership. Typically, when a company is created before marriage, that business is considered solely owned by the individual that started the venture. However, if a business began after marriage or shared funds were used to help start up a company, that business could be considered a shared marital asset, leaving it open for division between spouses. 

A business valuation includes analyzing the company's financial value to understand the market value of that business. Usually, this is done by an accountant or divorce attorney skilled in this practice area. By obtaining a business valuation, the business owner may be able to protect the business as an asset during a divorce. 

How Would a Business Valuation Help Me?

If you are a business owner in Illinois preparing for a divorce, a business valuation can help you protect your interest within the company. Depending on when the business was created in relation to your marriage, the company may be considered both you and your spouse's property. 

Depending on your financial needs, you and your spouse may choose from the following options:

• Pursue sole ownership of the business after the divorce 
• Continue shared ownership with your ex-spouse
• Sell the company and obtain a profit 

This decision may be challenging to make, so a business valuation is a helpful tool. During a business valuation, spouses can see a few essential factors regarding the business, including the market value of the business, the value in comparison to similar business, how much income the company generates for the owner, and if there are any outstanding debts. This information is vital knowledge when choosing whether to sell, share, or fight for sole business ownership during a divorce. 

Speak to a Wheaton Business Valuation Attorney

Suppose you are a business owner preparing for divorce in Illinois. In that case, it is in your best interest to contact an attorney skilled in divorce proceedings and obtain a business valuation. Our Warrenville divorce attorney at Hensley Sendek Law has experience in high-value asset division and business valuation. If you would like to schedule a free consultation with our office, please contact us at 630-358-9029. 

Sources:

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000 

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+V&ActID=2086&ChapterID=59&SeqStart=6200000&SeqEnd=8675000