Divorce Lawyers for Business Valuation in Kane County

Law Firm for Business Owners in Divorce to Determine Asset Distribution in Elgin, Huntley, and across Illinois

Illinois divorce law is practiced in accordance with the Illinois Marriage and Dissolution of Marriage Act (IMDMA). All assets and debts that are considered marital property among the parties are subject to equitable distribution. Marital property is that which is acquired during the marriage. The distribution process is more complex when a spouse(s) is a business owner. Even if one spouse had no interest or participation in the business, that spouse is likely entitled to a portion of the asset's value. In some cases, if the business was owned by one party prior to the marriage, then the gain in value since the marriage began may be subject to division. Any contributions that the non-owner party made to the business may also to be considered.

The attorneys at Ariano Hardy Ritt Nyuli Richmond Lytle Goettel P.C. (AHR) aid divorcing couples who own businesses by assisting them with business division and assets. At AHR, we are dedicated to striving for the best legal outcome for all of our clients.

How Courts Handle Business Division in Divorce

Generally, the courts will award the business to the spouse most involved with the entity. Having the couple retain joint ownership of the business after divorce is not usually a viable option. When awarding the business to one spouse, courts will offset this by assigning other assets to the other spouse or awarding some monetary "buyout." In order to accurately determine what is equitable, the business's value must be determined.

Determining the Value of the Business

The goal in a business valuation is to determine the fair market value. In doing so, the courts may consider fixed and receivable assets as well as the goodwill and liabilities involved. Three common ways of evaluating the assets include:

• Market-based: This method uses the market value of comparable entities to come to an estimated value.
• Income-based: This method focuses on the future revenues of the business, which may consider market projections, typically with assistance from a professional appraiser.
• Asset-based: Best suited for manufacturing or retail, this approach evaluates the assets of the organization. This method is not recommended for service-based business because they lack large, fixed assets.

The Goodwill of a Business

There are two types of "goodwill" that are intangible assets of a business. Enterprise goodwill may include patents or branding. Enterprise goodwill includes assets of the business that exist independently from ownership. Personal goodwill is that which specifically exists because of the owner. For example, Bill's Barber Shop is largely dependent on Bill's performance and customer relationships.

Premarital Agreements

A prenuptial agreement is a contract that couples agree upon before marriage that classifies marital and non-marital property owned by the parties. It provides a framework for how the property would be allocated if the marriage were terminated. The agreements are helpful in divorces where a business exists or in cases where couples have significant assets. A post-marital agreement serves this same function; however, the post-marital agreement is signed after the couple is married. Courts typically act in accordance with the agreements if both parties entered the agreement on a voluntary basis and accurately disclosed their assets and interests in the contract.

Attorneys for Dividing Assets in Divorce in South Elgin

The law firm of AHR has been practicing family law for over 35 years. We have experience in complex divorce cases including those in which high assets or owned businesses exist. For a complimentary consultation, contact us today at 847-695-2400. We serve clients in Elgin, Huntley, and throughout Illinois.