Property of Division In Illinois
Division of property during a divorce can be quite hectic for couples without an idea about the Illinois laws pertaining to this matter or an idea of the value of your assets and debts. If you are currently involved in divorce proceedings with your spouse, use this information to learn how to divide property according to Illinois law.
If either you, your spouse, or both of you started or purchased a closely-held business during your marriage such as a professional practice (such as a legal, dental, or medical practice), or a service oriented business (such as a car repair shop), manufacturing company, or any other type of business, then the valuation and division of that business can become a major focus of your divorce. In Illinois, marital property includes a business started during the marriage, and thus is subject to division in a divorce.
What is Marital Property?
The nature of the property or the title in question might determine whether the property is marital or nonmarital. By definition, marital property is property acquired by either of the 2 spouses while they are married together with their individual or joint income. In this case, it is irrelevant to consider the title on the property. The list can be long:
- Homes (vacation & residential)
- Stock Options
- Retirement Plans & Pensions
- Investment & Bank Accounts & Brokerage
Valuing a Closely-Held Business
Properly valuing your business is critical to getting your fair share. Different types of businesses present different valuation challenges. A business selling a product may be less dependent upon the personal involvement of a spouse than a specialized service business, such as a medical practice, where the continuing value of the business is often wholly dependent upon continued professional services.
Rutter Family Law LLC will work with experts such as accountants & appraisers to properly value a business.
The 3 Main Business Valuation Models Include:
- Income Valuation (i.e. present value of future net income)
- Market-Based Valuation (i.e. what the business could be sold for)
- Asset-Based Valuation (i.e. net value of the business assets)
In the case of a professional practice (such as a medical practice), for example, an income valuation that assumes the continuation of the services provided by the doctor/spouse can be very high. A market-based approach (how much the business could be sold for) will likely be significantly less, as the practice will not usually be worth a high dollar amount if the doctor is no longer going to be involved in the business. The asset-based valuation may yield the lowest value of the business, as the assets (which may consist primarily of office equipment and furniture) may have a very low market value.
Because of the wide variations in valuation that can result in different valuation models, it is important that an attorney fights aggressively to see that the model that is the most advantageous for a client be used.
A division of property divorce can be very complex & a lot is at stake. Contact Rutter Family Law LLC today at (630) 940-9107 for an appointment.
The sooner you reach out to us, the sooner we can discuss your options and how best to help you achieve the results that you need in your situation. To schedule a free consultation, call us at 630.940.9107 or send us an email.