For married Illinois couples, splitting up assets can be one of the most challenges and contentious parts of getting a divorce. Obtaining proper valuations for all assets and then determining which spouse will receive which asset or parts of assets is no easy task. When a primary marital asset is or could be a business, the challenges can increase even more. Other people such as employees and even other owners or shareholders may be involved as well as the spouses themselves. Knowing how to handle these situations requires great care.
As Forbes explains, a business is an asset like any other. That naturally leads to three options that couples have when deciding what to do with a business when getting divorced. They can sell the business outright and split the proceeds. One spouse can buy the other spouse out or they can continue to run the business together. Certainly none of these choices may be ideal but they are the reality if no other provisions like those set forth in a prenuptial or postnuptial agreement exist.
Crain’s Chicago Business indicates that marital contracts can be very useful tools for divorcing spouses who have ownership of or interest in businesses. However, there are also other ways that people can divorce-proof their businesses, or minimize the negative impact that a divorce may have on a business.
Strong buy-sell agreements can facilitate valuation of businesses and other options for protecting businesses in difficult times. Detailed shareholder agreements also can help to put the life of the business as a priority over the interests of any shareholder, including a divorcing spouse.