Is My Business Considered Marital Property in Illinois?

If you have poured your blood, sweat, and tears into a business, it is naturally very personal to you, and you would like to keep it as separate as possible in the event of a divorce. The most important point to make here is that doing so is going to be complicated, and you need a dedicated Illinois divorce attorney with considerable experience successfully handling these challenging matters on your side. 

Illinois Is an Equitable Distribution State

In the State of Illinois, marital property must be divided between divorcing spouses equitably. This means fairly when you factor in the relevant circumstances. Those assets that you acquire while you are married – other than gifts or inheritances in your name or your spouse’s name only – are considered marital property, which must be part of the equitable distribution. Those assets that you bring into your marriage with you – and that you keep distinctly separate – will remain your separate property (which avoids the equitable distribution of your marital property). 

It is important to note, however, that keeping a business distinctly separate is far easier said than done. Further, any increase in value experienced by your business is likely to be marital property that will need to be divided equitably. 

Is It Marital or Is It Separate?

If your business followed you into your marriage – perhaps as a family business – it begins as separate property. Over the course of your marriage, however, there are many factors that can help tip the balance toward marital property, including all the following:

• If you intermingled personal assets with your business assets, such as by financing business improvements with personal funding, your business is likely marital. 
• If your spouse worked for your business or helped you strategize business growth and development, proving the separate nature of your business can be difficult.
• If you ran the business but did not earn an income that contributed to your household from it, your holdings in the business will likely be considered marital. 
• If any joint funds flowed through the business for any reason, it blurs the line between marital and separate property and makes your assertion of the business’s separate nature less plausible. 

One way that a business owner can proactively protect the separate nature of a business is with either a prenuptial agreement or a postnuptial agreement that specifically addresses the matter. 

Reach out to an Experienced Illinois Divorce Attorney for the Legal Guidance You Are Looking For

If you have a business that you are concerned about protecting in your divorce, Cameron H. Goodman at Goodman Law Firm is an accomplished Illinois divorce attorney who is well versed at skillfully protecting the property rights of clients like you, and he is here for you, too. Business ownership can be one of the most challenging aspects of property division, so please do not wait to contact us for more information about how we can help you today.