How Do I Protect My Business Assets During Divorce?
Building a business until it is substantially profitable can take years, so how do you protect business assets after all of that effort? The last thing you want is to split business assets with your ex-spouse during a divorce. This can be a problem in Illinois since in the state marital property and assets are split in accordance with equitable distribution.
In other words, the division is far from 50/50 and any assets that you acquire during your marriage is subject to division. Anything that you or your spouse got before the marriage is not considered during a divorce case.
How to Protect Business Assets in an Illinois Divorce Case
The ideal way to prevent business asset division is through a post or prenuptial agreement. However, if you were unable to prepare these documents before divorce proceedings, you can use the following strategies:
1. Remove Your Spouse as a Business Partner Gradually
If your spouse has an active role in your business and has been an integral member for years, chances are their share will increase. If your marriage is coming to an end, but divorce proceedings haven’t started yet, phasing out your spouse as a business partner is a sound strategy.
2. Sacrifice Certain Assets
Even though you may think that giving your spouse a share of the company is a good idea during the divorce, think again. Your company may not be making a lot of money at present, but its earnings can increase substantially in the future, thus giving your ex a bigger slice of the pay. Prevent this by sacrificing certain assets such as retirement pensions or even your home to your spouse rather than more shares in your company. You can always buy a new one later when your business takes off.
3. Get Your Business Discretely Evaluated
Besides the court-appointed evaluation, get your business privately evaluated as well. The former may not be as accurate as the latter so you will have a stronger argument when it comes to asset division. However, bear in mind that your spouse may also have the same idea. At one point, both of you will have to agree to a valuation. Make sure you have a professional business asset division attorney at your side during this time to avoid a bad deal.
This is where the Law Office of Fedor Kozlov P.C. comes into the picture. We represent clients in Schaumburg, Illinois in asset division as well as other complex issues pertaining to a divorce. Get in touch with us for a consultation today.