Schaumburg Divorce Attorney for Business Owners
75% of the businesses in Illinois have 10 or fewer employees, and almost all of these enterprises are family-owned businesses. Common examples include service businesses, like restaurants, and professional organizations, like law offices. Frequently, the business is the family’s only source of income. As a result, upon marriage dissolution, division of business property might be the biggest single issue in the divorce.
At the Law Offices of Martin Delaney, our diligent Schaumburg divorce attorneys for business owners know how important the details are. So, before we stand up for you, we do our homework. We carefully review financial reports, market data, sales records, and other information. That way, the final resolution clearly upholds your legal and financial rights. A necessary part of this process also includes a long conversation, so we can clearly lay out your options as well as the pros and cons of each one.
Business Owners and Premarital Operating Agreements
Anticipation and planning are often the keys to a successful problem resolution, and that is usually true in the business property division realm. It is difficult to think about divorce and premarital agreements when the marriage is new. However, even though no one expects to die early, responsible people still purchase life insurance. The same principle applies here.
Premarital agreements clearly lay out operational details, such as who will manage the business’ daily operations. Additionally, these pacts usually outline inheritance and succession matters, so the business can keep going in accordance with the owner’s wishes.
Generally, a Schaumburg divorce attorney for business owners can draft a premarital agreement after just one office visit. These agreements are usually enforceable unless there is clear evidence of fraud or dishonesty.
Classifying Business Property
The basic rule in these situations is that only property acquired before the marriage is non-marital property. But this rule does not always extend to all situations, particularly if a business is involved.
Commingling is a good example. Assume the Wife is a dentist. Before the marriage, she had a struggling practice. Husband became her office manager, and largely because of his efforts, Wife’s practice grew and prospered. If the couple divorces, how much of the practice is Wife’s nonmarital property, and how much is marital property subject to division?
Business goodwill is another example. Typically, if the goodwill comes from the name of the business (McDonald’s Restaurant), the business goodwill is marital property. If the goodwill comes from the individual’s name (Ben’s Barber Shop), the goodwill is non-marital property. Placing a dollar figure on intangible things like business goodwill is a rather laborious process, as outlined below.
After the business property is classified, a Schaumburg divorce attorney for business owners must determine how much the business is worth. There are several methods, and most of them involve a professional business appraiser.
Some businesses, like the aforementioned restaurants, are rather easy to value. Most businesses, like realty offices, are different. These businesses have practically no assets. So, their value depends on future earning potential, and that is a speculative figure at best.
There is often a more fundamental question as well. Many people get along better as business partners than as spouses. So, it is not always best to sell the business and divide the proceeds. A buyout might be appropriate as well, especially if one spouse wants to keep the business in the family.
Connect with a Savvy Attorney
Business property division is one of the most complex aspects of a marriage dissolution. For a free consultation with an experienced Schaumburg divorce attorney for business owners, contact the Law Offices of Martin A. Delaney III, Ltd.