Divorce with a Family Business
When a husband and wife decide to get a divorce, one of the most difficult issues that may arise is the division of marital property. One of the many property issues that may cause a conflict is the division of a family business.
A husband and wife may have very differing views on how a business should be divided justly between the parties. There may also be disputes as to the value of the business.
How Courts 'Divide' A Family-Owned Company
In Illinois, family court judges are required to make a "just distribution" of marital assets. In an Illinois divorce involving a family business, the court will consider many issues, including the spouse's contributions to the business, whether the business was operated by one of the parties prior to the marriage, the value of the business, and the financial needs of the parties.
Since there is no way to truly "divide" a business, the court will typically place a value on the business and award the parties an interest in the business' value.
Getting The Proper Valuation
While a marital business may be sold for profit, most divorce cases where a husband and wife own a business do not result in the sale of the business. Rather, it is more typical for one of the spouses to be awarded the business, with the other spouse receiving compensation for their interest in the business.
Disputes frequently arise where the spouse keeping the business places a lower value on the business and the spouse receiving compensation for their interest in the business places a higher value on the business.
While these disputes can be heated, they may be diffused by an agreement between the parties to retain an independent expert who will perform a business valuation. When the parties (or their attorneys) cannot reach an agreement on a valuation expert, the parties may need to retain their own experts. The key to protecting your rights - in either case - is to have experienced legal representation.
Contact Thomas W. Hunter P.C. for help
If you are getting a divorce and the division of a family business or other complex property division issue may come into play, contact an experienced divorce lawyer at the law firm of Thomas W. Hunter, P.C., we have been practicing exclusively in family law since 1974. We are well equipped to handle even the most complex property division issues in a divorce. Contact us for a free consultation and case review.