Posted on in Property Division

Il divorce lawyerFamily businesses can be difficult to successfully maintain. Some believe that mixing family and business is a recipe for disaster; however, family businesses often become the pride and joy of the owners. Because the businesses are often built from the ground up, it is much more difficult to let them go. This is often a problem that divorced couples who own a family business face. Not only do they have a personal connection to their workplace, but those involved in family businesses often have often invested a lot of time and money into their business. Continue reading to learn about the various options divorced couples have when deciding what to do with their family-owned business.

Your Options

There are a variety of options available to those trying to figure out what to do with the family business while going through a divorce. Every couple’s divorce is different, some being a mutual decision while others happen by surprise. Regardless of the situation at hand, sometimes one has to separate emotions from business no matter how much time and energy they have put into their job.

  1. Continue Owning the Business Together: Though this option does not work for everyone, some choose to continue running their family business in a similar manner. This is more common in couples that are mutually ending their marriage amicably. While you may decide to work different schedules and keep business meetings to a minimum, keeping the family business within the family is an option for some.

  2. Buy Out Your Ex-Spouse: For most couples, working together post-divorce is unhealthy and unreasonable. An option for those who no longer want to be tied together personally or professionally is to have one spouse buy out the other. This will require legal assistance on both sides but is often a relatively quick and easy solution.

  3. Sell the Business: Family-owned businesses are more than just a business to those involved. Memories become tied to the building and the business as a whole, making it extremely difficult to continue working in the environment. Many decide to sell their family businesses and have a fresh start. This can be due to the personal connection or financial burden that the business has once a marriage comes to an end.

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Illinois divorce attorneyIn a divorce, the couple’s marital assets are not the only thing that has to be divided. Their marital debts, too, must be divided according to the doctrine of equitable distribution. Just like marital assets, most debts accrued during a couple’s marriage are considered to be property of both parties. In a divorce, the court consider a variety of factors, such as each partner’s income and contributions to the marriage, to determine an appropriate way to divide these debts.

Examples of Marital Debts

Marital debt can include:

  • The outstanding mortgage on the couple’s home;
  • Debt owed on joint credit cards;
  • Student debt for education pursued during the marriage;
  • Medical debt; and
  • Outstanding debt on financed vehicles.

Dividing Debt According to Equitable Distribution

Even if a specific debt was accrued primarily for one partner’s benefit, such as medical bills for one spouse’s treatment or student debt for his or her degree, both partners are liable for it during and after their divorce.

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Illinois divorce lawyerIn an Illinois divorce, the couple’s assets must be divided equitably. This is only possible when both partners are transparent about the assets they own and the assets’ values.

Sometimes, dishonest individuals use their partners’ lack of knowledge about their marital assets to try to keep the assets out of the property division process and leave the marriage with more than their fair share of these assets. If you are thinking about doing this, stop that train of thought. You should not try to hide assets from your former partner in your divorce, and this is why:

Your Former Spouse Can Find the Assets You Hide

If your spouse has a feeling you are hiding assets, he or she can uncover them through some detective work with his or her lawyer and/or a forensic accountant. There is no “safe” way to steal assets from your marital pool – whether you think you can hide assets by transferring them into a custodial account for your child, having a friend “hold” your assets in their account for you, or making cash purchases to liquidate the money in your joint accounts, your spouse can always trace your steps and find the money if he or she is willing to do so.

Your Unwillingness to Cooperate with the Court Can Haunt You Later

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Illinois divorce lawyerNo matter how you approach your divorce, you will need to work through the division of your marital property. When you divorce through mediation, a neutral third party guides you and your spouse through each issue to be resolved and finalized in your divorce settlement. For many couples, the division of their marital property is the most complex of these issues.

Before you begin working with a mediator, talk to your lawyer about how you should approach your property division. You will need to be your own advocate during the mediation meetings, which can be confusing and overwhelming if you do not completely understand why a specific breakdown of your marital assets is in your best interest.

What Are Your Current Financial Needs?

If you do not make enough money to cover your home’s mortgage and property tax payments on your own, it is probably not in your best interest to fight to retain the house. In this scenario, you might see a much greater benefit by selling the home and splitting the profit with your former spouse. If you receive spousal maintenance, this could be a consideration in your property division. If you are a parent, your parenting plan could also be a point to consider when dividing your assets.

Think of the Future

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b2ap3_thumbnail_asset-division.jpgRegardless of how much or how little you and your soon-to-be ex-spouse own, the division of assets in the divorce process can significantly impact your financial standing after your marriage is over. Whether you need to look out for your own well-being or you have additional family members to care for after the separation, money matters. What you and your spouse split and how you split it will be a defining factor in the overall quality of your long-term financial security.

Where Asset Division Can Get Tricky

Determining Value

Some couples make the mistake of believing that the most important factor in the division of assets is the flat dollar value. Whatever something is worth must determine its overall value and it should simply be divided evenly, right? This is not always the case. When it comes to most assets, their worth must be based on more than just their dollar value. For example, you must take into account factors such as an asset’s liquidity as well as how its sale will be affected by taxes. The long-term worth of a piece of property is just as important as its immediate worth.

Types of Property

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