Will Your Business Be Divided in an Illinois Divorce? 

 Posted on April 03, 2025 in Business and Divorce

In Illinois, a divorce can significantly impact a business, especially if it qualifies to be included as part of the division of marital assets. The state follows an equitable distribution rule, which means that marital property is divided fairly, and that can include a business. How the company is affected depends on several factors, and you should review the matter with an Illinois family law attorney to understand your rights. At Calabrese Associates, P.C., we can assist with asset division and how it relates to your business.

Business Classification

First, how can you know whether the business is marital or non-marital property? It is marital property if you started or acquired the business during your marriage. If so, it is subject to division. It does not matter which spouse ran the business. Even if only your name is on the business, it still may be considered marital property if marital efforts and funds were involved in the company’s growth.

On the other hand, if you owned the company before the marriage, it could be non-marital property and remain yours, unless the other spouse worked in the company or marital funds contributed to the business. In these situations, the company might still be considered marital property.

Business Valuation

If your business is marital property, it must be valued and divided in the divorce. This process typically requires a professional valuation. Standard valuation methods are: 

• Asset approach: Adding up tangible and intangible assets

• Market approach: Comparing similar companies

• Income approach: Projecting future earnings by looking at past performance

Business valuation can be complex, and it can be the source of many disagreements. An experienced Naperville, IL family law attorney can assist you with business valuation and any related litigation.

Business Division Options

After the company is valued, it can be divided for divorce purposes in several ways: 

• Buyout: One party keeps the company and pays the other with cash or other assets, such as real estate. This option is typical when one party is more involved in the company than the other.

• Co-ownership: Both parties retain ownership after the divorce. This situation happens less frequently, but it is possible if the spouses can still work together.

• Sale: The company is sold, and proceeds are divided equitably. This could disrupt the business, but is sometimes considered the best way to ensure both spouses get a fair share.

Consider Protecting the Business

Divorce can make it more complicated to operate and own a successful business. That is why many consider signing a prenuptial or postnuptial agreement. Such agreements at the beginning of a marriage can designate the company as separate property or detail how it will be handled in a divorce. An Illinois family law attorney can assist you with drafting a prenuptial or postnuptial agreement. Additionally, company and personal finances should be kept separate during the marriage. Doing so can help ensure that the business is considered non-marital property in a divorce.

Contact a Naperville, IL Family Lawyer Today

A divorce can significantly affect how a business is owned and operated. Reliable legal advice from a qualified DuPage County, IL family law attorney at Calabrese Associates, P.C. can ensure you have the best outcome from any business valuation or division. Call our offices at 630-393-3111 today to schedule your initial consultation.