Divorce is rarely simple, but when one or both spouses own a business, the process becomes even more complex. In Illinois, business interests are treated like other marital assets — they may be subject to division depending on how they’re classified and valued. If you’re a business owner considering or facing divorce, understanding your rights and obligations early on can help you protect what you’ve worked hard to build.
Is Your Business a Marital Asset?
One of the first issues Illinois courts evaluate is whether the business is considered marital or non-marital property. Generally, any business formed or developed during the marriage may be classified as marital property — even if it’s only in one spouse’s name.
- Marital Property: If the business was launched or grew during the marriage, it will likely be subject to division.
- Non-Marital Property: A business that predates the marriage might be protected — but only if it was kept separate and not significantly supported by marital resources.
Even a business started before marriage can become partly marital if both spouses contributed time, labor, or finances to its success.
How Illinois Courts Value a Business
Once a business is classified as a marital asset, the next step is determining its value. This typically involves a financial expert, such as a business appraiser or forensic accountant.
There are three common valuation methods:
- Income Approach – Based on projected cash flow and profitability.
- Market Approach – Compares your business to recent sales of similar companies.
- Asset Approach – Focuses on the net value of business assets and liabilities.
Accurate valuation is critical. If you undervalue or overvalue the business, you risk an inequitable settlement or future legal disputes.
Will the Business Be Divided?
Unlike other assets, a business can’t simply be “split.” Illinois follows equitable distribution laws, meaning property is divided fairly — but not always equally.
In divorce cases involving business owners, the court may:
- Award the business to one spouse and balance it with other marital assets (like real estate or retirement accounts)
- Allow one spouse to “buy out” the other’s interest
- In rare cases, order the business sold and divide the proceeds
Judges aim to preserve the business’s operations, particularly when it’s the primary income source for one or both parties.
Keeping Business Finances Separate
Maintaining clear boundaries between your personal and business finances can help you argue that the business is non-marital property. Best practices include:
- Using separate bank accounts
- Keeping detailed financial records
- Avoiding the use of marital funds to cover business expenses
The more documentation you have to support your claim, the better positioned you’ll be during divorce proceedings.
Business Income and Spousal Maintenance
The income generated from a business can affect spousal support calculations. Courts don’t just consider your W-2 salary — they assess distributions, profits, retained earnings, and even perks like vehicles or housing provided through the company.
This is one of many reasons why business owners should work closely with legal and financial professionals to present a clear and accurate financial picture.
Prenups, Postnups, and Business Protection
One of the most effective ways to protect a business is by creating a prenuptial or postnuptial agreement. These documents can define whether a business remains separate property in the event of divorce.
If you’re already married and own a business, it’s not too late — a postnuptial agreement can still clarify rights and expectations moving forward.
The Importance of the Right Legal Team
Divorces involving business interests often require a coordinated team that understands family law and complex asset division. This typically includes attorneys, appraisers, accountants, and financial planners.
If you’re searching for divorce lawyers for business owner in Chicago, choose a legal team with proven experience in both asset protection and family court negotiations. The right guidance can make all the difference in preserving your business and achieving a fair outcome.
Final Thoughts
Divorcing as a business owner brings unique challenges. From protecting your company’s value to understanding how courts divide business assets, the process demands careful planning and knowledgeable advocacy. With your livelihood and financial future at stake, it’s essential to be proactive and well-prepared.
If you’re navigating a divorce and own a business, consult with the Experienced Chicago Divorce lawyers at Anderson Boback & Marshall. Our team understands the intricacies of business ownership and family law — and we’re here to help you move forward with confidence.