Ekker Law, P.C. / Steven B. Ekker, Esq.

221 S. Main Street, Suite 200
Sugar Grove, IL 60554

Ekker Law, P.C. / Steven B. Ekker, Esq.



Business Valuation And Division After Divorce

Posted on in Divorce

sugar grove divorce lawyerEquitable distribution states, such as Illinois, courts equitably divide assets and debts during divorce. The assets and debts are considered the couple’s marital property, and the division of such property can be complex. Businesses may also fall under the umbrella of marital property. The two parties will have to appropriately divide the interest they share in the business, often requiring the assistance of expert witnesses to value the business’s assets effectively. 

Businesses Can Be Considered Marital Assets

Businesses will automatically be considered marital property if the spouses are co-owners. However, there are several additional ways in which a business may be deemed marital property. For instance, if the business was formed after the two parties married, it will likely be considered marital property. Alternatively, when businesses are formed prior to marriage, they likely will not be included in marital property. An exception to this would be if the other spouse made direct or indirect contributions to the business throughout the marriage. 

Prenuptial agreements can help to prevent businesses from being considered marital property in the event of a divorce. Alternatively, if the business is formed during the marriage, a postnuptial agreement can be utilized to clarify ownership of the business.

Generally, the couple will have three options in terms of how to properly divide their business interest in the event of a divorce. One option is for one party to buy out the other’s share. Another option includes both parties agreeing to sell the business to a third party. Additionally, the couple may opt to continue the co-ownership of the business. 

Properly Valuing A Business

Businesses are comprised of tangible assets, such as cash, inventory, and equipment, as well as intangible assets such as a company’s goodwill, trademark rights, and copyrights. 

There are many methods that can be used to properly value a business, including:

  • The market approach: valuing the business by examining comparative businesses of the same industry and locale that have been sold 

  • The income approach: valuing the business by analyzing the current and anticipated earnings, while factoring in the potential risk of the earnings not being received

  • The asset approach: valuing the business by placing a monetary value on the business’s assets and debts

The valuation of such assets can be extremely subjective, especially considering the different methods available. Because of this, each party should obtain separate counsel and experts to support their best interests.

Contact Our Sugar Grove Divorce Attorney Today

Illinois law allows for fair and just distribution of assets between two individuals in the event of a divorce. When the divorce involves a shared interest in a business that was formed during the marriage, many complications can arise.  The attorneys with Ekker Law, P.C. / Steven B. Ekker, Esq., understand the challenges an individual may face when attempting to divide their marital property properly. If you need guidance preparing for your divorce and strategizing a property division plan that suits your needs and preferences, contact our Kane County divorce attorneys today by calling 630-234-4682 to schedule a free consultation. 





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