Address 1200 Harger Road, Suite 830, Oak Brook, IL 60523
630-472-9700Available 24/7
Search
Facebook Twitter LinkedIn Youtube Blog
Kathryn L. Harry & Associates, P.C.
630-472-9700Available 24/7
Subscribe to this list via RSS Blog posts tagged in division of assets

IL divorce lawyerWhen getting a divorce, one serious concern that will appear for those who own a family business, or a small business in general, is how to divide it, or even if division is necessary. Illinois law on the subject can get confusing, so it may be a good idea to consult an experienced attorney on the subject before moving forward with asset division.

Obtaining a Business Valuation

One of the first steps that can help a couple decide what to do with a family business is to obtain a business valuation, usually through an accountant or licensed appraiser. Without an accurate estimate of how much a business costs, one cannot accurately tell how the rest of the marital estate must be divided in order to keep a business in one piece, or how much must be offset if the business is to be sold and its profits and equity divided. There are, however, multiple different ways to accurately value a business, depending on the type of method used - the two most common in divorce-related cases are the comparable model and the asset valuation model.

...

Illinois divorce lawyerPrenuptial agreements, also called premarital agreement, are becoming more and more common in this day and age. However, many remain unaware that they are not cure-alls; there are certain things that are not permitted to be disposed of or decided within an agreement of this nature. If you are getting married in Illinois and you and your future spouse decide to execute a prenuptial agreement, you must be aware of what can and cannot be included, or you run the risk of the agreement being held to be invalid.

The ILUPAA

Illinois has adopted the Uniform Premarital Agreement Act (UPAA or ILUPAA), which establishes specific guidelines and requirements for prenups that must be upheld. A prenup is essentially a contract, and like any other contract, certain things may not be included, and certain things can only be included if done so properly. The contract does not become effective until the marriage actually takes place, but once it is effective, it will be upheld unless it was unconscionable.

...

Illinois divorce lawyerDuring an Illinois divorce, the division of marital property is very often complex and divisive. One asset that can spark significant debate is each spouse’s retirement account or accounts, simply because the process to divide such an account can be laborious, and each spouse wants to ensure that division is fair and above board. Having an understanding of how a retirement account is divided can go a long way toward quelling arguments before they start.

QDROs

With most private retirement accounts, the proceeds are normally only payable to the listed beneficiary - at times, the employee who earned it; at times, the spouse, at times, someone else. The Employee Retirement Income Security Act (ERISA) covers 401(k)s and mandates that only one’s spouse may be the beneficiary, although Individual Retirement Accounts (IRAs) are not covered by ERISA.

...

Illinois divorce lawyerEvery marriage accumulates assets, classified as marital property, that must be divided upon divorce. However, the division process for assets that have significant value can get much more complex, simply because there must be a more thorough balancing of assets and debts in order to make sure that both spouses get a fair share, rather than leaving one spouse with the lion’s share of the property and one with the debts. It is important to have a good grasp of the process, so you can be doubly sure that you are not being given the proverbial short end of the stick.

Each Asset Is Different

Perhaps the most important thing to understand about this process of asset division is that each situation is different, as well as each couple. Some of the most common high-value assets include family businesses, retirement accounts, real property, and stakes in corporations, and all of these must be handled differently. Even more factors enter into the equation when one assesses each spouse’s role in acquiring or maintaining the asset, as well as numerous other factors generally considered by the court in every asset division.

...

Posted on in Business Valuation

Illinois divorce attorneyWhen a couple decides to divorce, the assets and debts accumulated during their marriage will be equitably distributed to each party. Sometimes this means that assets are sold off so that they can be converted into liquid funds. On the other hand, Illinois law permits one party to be awarded the asset in lieu of receiving other marital assets. Dividing assets in the latter fashion is a very complex process if a family business exists. Ensuring that a proper valuation is reached so the business asset may be offset by other marital assets is a time-consuming and difficult process that requires the use of experts.

Illinois is a state that follows the equitable distribution theory of marital asset allocation in a divorce. What is a marital asset? Generally speaking, a business is classified as a marital asset if it was acquired during the marriage, and was not acquired by inheritance or gift. (Inheritances or gifts to one spouse are considered non-marital property by definition.) What is considered an equitable distribution? Each case is very different. Rather than simply selling all the assets and splitting the proceeds, some parties may prefer to be awarded a particular asset in lieu of another asset. A business, assuming that it is a marital asset, is no exception to this process. Sometimes one spouse wishes to keep the business, especially if it is a professional practice like a doctor’s office. A party may do so, but he/she will have to give up other marital assets in exchange for it. This means that an expert must place a value on the business before an equitable distribution of marital assets may be reached. .

How Is a Business Evaluated?

...
Lead Counsel
AVVO
Newsweek
National Trial Lawyers
Rated by Super Lawyers
Back to Top