When is a Business Considered Marital Property in Illinois?
In many Illinois divorce cases, especially those in which the couple has a high net worth, business assets are divided along with the rest of the spouses’ marital property. However, there are often complications when it comes to business property division, starting with the determination of whether a business is, in fact, a marital asset. If you are a business owner, it is important to understand the difference between non-marital and marital business assets as you prepare for your divorce.
Non-Marital Business Assets
In a divorce case, non-marital assets are those that are owned by each spouse individually. These assets do not have to be divided; rather, they will remain with the spouse who owns them. A business will likely qualify as a non-marital asset if one of the following is true:
You owned the business before you got married. Like most other types of assets, a business owned before marriage is the sole property of the spouse who owned it. A business founded or purchased solely with assets you held before your marriage can also be considered non-marital.
You acquired the business through an inheritance. As often happens with a family business, you may have become a business owner after someone passed the assets to you through a will or trust. In this case, the business will likely be your own property. The same is true if the business was gifted to you while the previous owner was still living.
You have a prenuptial or postnuptial agreement that defines the business as a non-marital asset. Marital property agreements like prenups and postnups can set aside certain assets as non-marital property even if they would normally be considered a marital asset.
Marital Business Assets
Marital assets belong to both spouses together, and they must be divided equitably in an Illinois divorce. A business may be a marital asset if one of the following is true:
The business was established or acquired during the marriage. Timing is crucial for determining the marital status of a business asset. A business that dates from a time during your marriage can be considered a marital asset even if only one spouse is involved in its operations.
The business became commingled with marital assets. A business that may have once been a non-marital asset can become a marital asset if significant marital assets have been invested into the business. In this case, the business may need to be divided between spouses, or the original owner may need to reimburse their spouse for these contributions.
Contact a DuPage County Divorce Attorney
If you have business assets that may come into play in your divorce, the experienced Lombard divorce lawyers at [[title]] can help you determine whether they are non-marital or marital property. We can also help with business valuations and negotiation or litigation in pursuit of a property resolution. Call us today at 630-953-3000 to schedule a free initial consultation. We speak English and Polish.