Naperville, IL Business Divorce Lawyers

Knowledgeable Divorce Attorneys Representing Business Owners in Naperville, Illinois

Getting a divorce as a business owner often comes with extra complications. The stakes may be much higher, as your continued livelihood may be at risk in a messy dissolution of marriage. With that in mind, seeking legal representation is important for protecting your interests. A Naperville, IL divorce lawyer can walk you through the process step by step, taking thorough measures to safeguard your company.

At Fay & Farrow, our attorneys are deeply familiar with Illinois family law, drawing on decades of trial experience to help clients going through complex, high net worth divorces. Do not hesitate to reach out if you have questions about how we can help with your case.

Determining Ownership of a Business in a Divorce

When spouses own an interest in a business, Illinois law treats that interest as marital property if it was acquired or substantially enhanced during the marriage. Courts will examine the nature of the entity—whether a sole proprietorship, partnership, limited liability company, or corporation—and the ownership documents. If one spouse formed the business before marriage but the other contributed labor or capital afterward, the marital estate may include a portion of the business's value.

Any capital investments made with joint funds, such as cash injections for equipment purchases or improvements to leased property, can convert separate business interests into marital assets. Non-financial efforts can also increase goodwill or customer lists, both of which carry real economic value.

Courts will also review whether distributions of profits were treated as personal income or reinvested, since consistent reinvestment may suggest a shared ownership intent. Finally, any prenuptial or postnuptial agreements that address business interests will guide the court's determination, but they must meet statutory requirements to be enforceable.

How Are Businesses Valued in Illinois Divorces?

Valuing a closely held business requires careful analysis. Illinois courts often rely on one or more of the following approaches:

• The asset-based approach, which aggregates the fair market value of assets minus liabilities
• The income-based approach, which capitalizes earnings or discounts future cash flows to present value
• The market-based approach, which compares the business to similar enterprises that have recently sold

A qualified valuation expert will gather financial statements, tax returns, and industry data to select the most appropriate method. The expert's report becomes evidence that the court will weigh alongside testimony about the business's past performance and future prospects. At Fay & Farrow, we can work with these financial professionals to help you get a qualified appraisal of your company.

Methods of Dividing a Business in a Divorce

Once you and your spouse determine the business's value, you must decide how to divide that value fairly. One common solution is for one spouse to keep the business while the other receives different marital assets of equal worth, such as the family home, retirement accounts, or other investments. Another option is for one spouse to buy out the other's share by making a lump‐sum payment or arranging regular installments, which may involve refinancing or taking out a loan.

For businesses with more complex ownership structures, spouses often negotiate tailored arrangements. The company might buy back shares, establish deferred compensation plans, or create bonus structures that reflect each spouse's contributions. These customized agreements help address unique circumstances and keep the business running smoothly during and after the divorce.

Contact a Naperville, IL Divorce Attorney for Business Owners

The dissolution of a marriage poses significant challenges for entrepreneurs. Your livelihood, your employees, and the future of your business deserve careful attention. At Fay & Farrow, we guide business owners through each step of valuation, negotiation, and settlement drafting. Contact our Naperville, IL family law attorneys or call 630-961-0060 to schedule your free consultation.