Chicago Divorce for Business Owners Lawyer
Like a marriage, a business requires a great deal of effort and sweat equity to keep it going. If the marriage fails but the business thrives, business-owning spouses might have legitimate concerns about protecting their business in the divorce, while non-owning spouses will want to be sure they are being fairly treated and getting their fair share of any marital property that is rightfully theirs. The family law attorneys at Birnbaum Gelfman Sharma & Arnoux, LLC provide invaluable advice and assistance in these situations. Our firm’s lawyers have extensive experience handling divorce issues on behalf of business owners, executives, professionals and their spouses, and we are well-versed in the issues that arise and how they can best be dealt with. Contact our experienced Chicago business owner divorce lawyers today to discuss your concerns and find out how we can help.
Dealing With a Family Business in Divorce
If you started a business before you got married or started a business with separate funds, that business might be separate property that stays out of the property division in a divorce. However, if the business was operated with marital funds or labor from your spouse, started up during the marriage, or if your spouse sacrificed work or career to support your business, then some or all of the business could be considered marital property subject to equitable distribution between both spouses. Your spouse could be entitled to a portion of the value of the business or end up with an ownership interest in the business post-divorce.
If you drafted a prenuptial agreement before marriage or a postnuptial agreement during the marriage that set that business aside as separate property, we can help you enforce that agreement in settlement negotiations or litigation in court if needed. Prenuptial and postnuptial agreements are the best way to keep separate property separate, but they aren’t always completed or done correctly.
In the absence of a prenuptial or postnuptial agreement, there are still a number of different ways a business can be handled in a divorce. The three most common ways are:
- Continue to own or operate the business together post-divorce. If you were both actively engaged in business operations and can get along amicably after divorce, it’s possible to continue as business partners. Another idea is to hire a third party to manage the day-to-day operations of the business while you both maintain your ownership interests that you can leave to your children.
- Buy out your spouse’s ownership interest in the business. This could be done with cash in a lump sum or over time through installment payments, or through an exchange of other marital property in-kind. Our property division lawyers can help ensure that all marital property is properly characterized and accurately valued for a fair and equitable distribution.
- Sell the business and split the profits. This method might not be favorable to a spouse who would prefer to keep owning and running the business, but sometimes it makes the most sense in the big picture.
Birnbaum Gelfman Sharma & Arnoux can help you negotiate or litigate your preferred method of dealing with your family business or sole proprietorship.
When selling the business or buying out your spouse’s interest, it’s essential to arrive at a fair and accurate valuation. Our property division attorneys work with economists, accountants, and other experts and professionals as needed to value the business and submit that valuation to opposing counsel or the court. There are three common methods of business valuation; the best method to use depends on the nature of the business and other factors.
- The income approach. This is the most commonly used method of business valuation. You compare current profits with anticipated growth, considering risk and other factors. Expert assistance is generally needed.
- The asset approach. This method involves adding assets and subtracting liabilities to come up with a value for the business. It is the most direct approach, but it can be complicated when there are lots of assets and liabilities, including intangibles, to consider.
- The market approach. This method looks at recent sales of comparable businesses. This method is not optimal when the business is unique or in a niche market, or when there are factors that make the business incomparable to other businesses of a similar sort.
Contact Birnbaum Gelfman Sharma & Arnoux, LLC Today
Our skilled and knowledgeable family law attorneys are ready to protect your small business, closely-held business, family business or sole proprietorship in your divorce and offer practical advice to help you get a result that meets your needs and desires. Contact our experienced Chicago business owner divorce lawyers today.