Businesses can be considered marital property, even if they are owned wholly by only one spouse. Many people in Illinois learn this the hard way when getting divorced. They see their hard work eroded away when they must relinquish part of their businesses or pay large sums to their former partners.
If you own a business in part or in full or have some other type of interest in a business and are not yet married, you should take the opportunity now to find out how to protect your business if you find yourself getting divorced at some future date. When established sufficiently before a marriage has taken place, a trust can be a viable way of doing just this. According to Forbes, one form of trust well positioned for this purpose is a Domestic Asset Protection Trust. For businesses in other countries, the corollary would be a Foreign Asset Protection Trust.
When this form of trust is established, the ownership of all items covered by the trust then transfers from you to the trust. At this point, there is no option for those things to be considered part of a property division settlement in a divorce because only items owned by you, your spouse or both of you jointly become part of this mix. Not every business is eligible to be part of a Domestic Asset Protection Trust. An S Corporation is one example of excluded operating models.
You can learn more about options to protect your business from losses during a divorce at our equitable division website.
