As a business owner or executive, you have a lot to protect in your divorce. From protecting your business to preserving your wealth and maintaining your privacy to maintaining your relationship with your children, you need to make informed decisions. It would help if you were confident that you are doing everything you can to achieve your desired outcomes.
Fundamentally, getting divorced involves the same issues and procedures regardless of your occupation and assets. However, as a practical matter, owning a business, earning a substantial income, and having amassed significant wealth add complexity to the process. With this in mind, when preparing to go through a divorce as a business owner or executive, it is important to ensure that you give due consideration to all pertinent legal and pragmatic factors.
5 Unique Aspects of Getting Divorced as a Business Owner or Executive
So, what factors are we talking about specifically? The following are six unique aspects of getting divorced as a business owner or executive in Illinois:
1. Maintaining Ownership of Your Business
Businesses are considered property in Illinois, just like houses, bank accounts, and vehicles. As a result, one of the first issues you need to address is whether – and to what extent – your business qualifies as a marital asset for purposes of your divorce.
Generally speaking, an ownership interest in a business will qualify as a marital asset if the ownership interest was acquired during the marriage. If it was acquired prior to the marriage, it might not qualify as a marital asset, although this is not necessarily the case. It is also possible that a portion of the business could qualify as marital property while another portion is considered “separate” and not subject to distribution.
Of course, none of this applies if you have a valid and enforceable prenuptial agreement that protects your business.
To the extent that your business qualifies as a marital asset that is subject to distribution in your divorce, this does not necessarily mean that your spouse will end up owning a share. For example, you may be able to negotiate for 100% ownership of the business while giving up your interest in other marital assets. A “buy out” may be an option as well if you have sufficient marital or separate funds to cover your spouse’s share based on the overall equitable distribution of your marital property.
2. Calculating Alimony When You Don’t Have a Set Salary
If your business is your family’s primary source of income, this could present some unique challenges when calculating alimony. This is particularly true if you take periodic draws and do not have a set salary. You will need to work with your attorney to calculate your income for your divorce, and then you will need to work with this calculation to determine how much alimony (if any) is warranted.
3. Dealing with Executive Compensation and Benefits
As a business executive, your income can present some unique considerations during the divorce process as well. If you receive (or have received) equity or stock options, if you receive bonuses based on the company’s performance, or if you receive other forms of executive compensation and benefits other than the usual salary and health insurance, you will need to plan strategically for how to protect your past and future earnings to the fullest extent possible. Here, too, there are various options available, and, in most cases, working to negotiate an amicable outcome will be your best option.
4. Seeking Custody or Visitation Rights When You Work A Lot
As discussed previously, working full-time is not an automatic barrier to seeking custody in an Illinois divorce. However, it does make it important to plan. By going into your divorce with a strategy already in place, you can demonstrate that your desired custody or visitation rights serve your children’s best interests—as required under Illinois law.
5. Maintaining Privacy During the Divorce Process
If you are a business owner or executive, maintaining privacy during your divorce can take on heightened importance. While there is nothing wrong with getting divorced, having your family affairs made public can potentially impact your company’s business or your professional reputation. There are a few different options for maintaining privacy during your divorce, and you will want to discuss these options with your attorney at the outset of the process.
If You Own a Solo or Small Professional Practice…
If you own a solo or small professional practice, all of the considerations discussed above may apply to your divorce, and you may have additional questions as well. For example, is your professional license a piece of “property” that is subject to equitable distribution? Fortunately, in Illinois, the answer is a clear, “No.” Professional degrees and licenses are not considered property for divorce purposes in Illinois.
If your practice is your primary asset, does this mean that your spouse will get to have a say in how you run your practice after your divorce? This is a potentially complicated question that requires careful consideration. If your spouse is entitled to a share of the business, then control could possibly be an issue as well, and you will want to work with your divorce attorney to explore all options you have available.
If Your Spouse is a Business Owner or Executive…
If your spouse is a business owner or executive, you will want to think carefully about your priorities in your divorce. If you are entitled to a share of the business, do you want a share of the business, or would you rather leverage your share to secure other marital assets in your divorce? You will want to carefully consider many other questions as well, and you will want to rely on an experienced divorce attorney to help you make informed decisions.
Schedule an Appointment with Gurnee, IL Divorce Lawyer Deanna J. Bowen
Do you have questions about going through a divorce as a business owner or executive (or a business owner’s or executive’s spouse)? If so, we encourage you to contact our Lake County, IL divorce lawyer for a complimentary consultation. Call 847-623-4002 or contact us online to schedule an appointment today.