Divorce may be more complicated for business owners
Dividing marital property can be a contentious issue in any Illinois divorce. If one of the couple’s assets is a business, however, it can be especially complicated. Company owners who are approaching divorce should determine how much the business is worth and how to divide that value. An issue that’s all too common is one spouse being deceptive in regard to reporting income.
Generally speaking, there are three approaches to a business valuation. The process can be based on income, assets, or the market. The approach that is appropriate varies from case to case, but each of them begins with the company’s financials. In many cases, valuation professionals are brought in to review business records and accounting documents. If discovery is not properly handled, critical information can be missed and the value of property may not be fairly divided.
In some cases, it may be argued that one spouse is entitled to alimony payments based on the other spouse’s projected future income as well as a share of the business value. However, some courts in the United States have decided that this sort of arrangement is inequitable as it means one spouse gets double recovery for an asset.
It is also possible that a spouse who controls a business might try to hide assets or income in order to get a better share of the divided property. An attorney with experience in divorce law could help the other partner by using experts to review company documents or otherwise investigating the company’s finances. With accurate information in hand, legal counsel can properly negotiate the division of marital property. In the case of a contentious divorce, an attorney might argue on behalf of the client during family court hearings.