How Can I Protect My Family Business During My Divorce?

Posted on in Islamic Divorce

oakbrook terrace divorce lawyerCouples who choose to get divorced will need to address multiple legal and financial issues, including making decisions about the division of marital property. While addressing property ownership will be an important aspect of every divorce, it can become more complicated in high net worth divorce cases, including those where a spouse is a business owner. Family businesses can be an especially complex issue in an Islamic divorce, since the close relationships between family members and business associates may be affected by the end of a couple’s marriage. Spouses will need to be sure their rights and financial interests are protected in the decisions made. Business owners will want to determine how they can protect a family business and ensure that it can continue operating smoothly and successfully during and after their divorce.

Options for Protecting a Family Business

Ideally, business owners will want to take steps to protect their business either before they get married or during their marriage and before divorce becomes a possibility. A prenuptial or postnuptial agreement can protect a business by stating that one spouse will maintain full ownership of the business in the case of divorce, or these agreements can make decisions about how ownership of business interests and other assets will be handled if the couple’s marriage ends.

Those who do not have a prenuptial or postnuptial agreement may need to determine how to divide business interests during their divorce. If the business is a marital asset because it was founded or acquired while a couple was married, the value of the business will need to be divided along with other marital property. A business owned by one spouse before the marriage will usually not be considered marital property, but some business assets may be included in the marital estate if the business increased in value after the couple was married, or a business owner may be required to reimburse their spouse for the contributions they made to a family business.

To ensure that a family business can continue operating, one spouse will usually wish to remain the sole owner of the business. For a business that is a marital asset, the owner may be able to retain ownership by ensuring that the other spouse receives marital property of a similar value, or they may make arrangements to buy out the other spouse’s share of the business by setting up an ongoing payment plan. If a full buyout is not possible, or if both spouses have been involved in owning and managing the business, they may agree to maintain co-ownership of the business and work together as business partners following the divorce. However, couples in these situations will want to create a partnership agreement that provides them with an understanding of their ongoing roles and responsibilities, and they may wish to include options for either spouse to buy out the other spouse’s share of the business in the future.

Contact Our Oakbrook Terrace Asset Division Attorneys

If you are a business owner, you will want to make sure your business will be protected during your divorce. At Farooqi & Husain Law Office, we can advise you of your rights and options when dividing marital property, and we will advocate on your behalf and work to protect your financial interests. Contact our DuPage County divorce lawyers at 630-909-9114 to arrange a confidential consultation.

Sources:

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+V&ActID=2086&ChapterID=59&SeqStart=6200000&SeqEnd=8675000

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