People who are starting a company or getting married generally do not want to think about getting a divorce. However, business owners in Illinois may want to take steps to protect their company if their marriages end. Prenuptial and postnuptial agreements do not mean a couple is planning to get a divorce or that one person wants to take financial advantage of the other. Instead, such an agreement provides the opportunity to talk about financial matters and how property should be divided outside of the emotionally fraught atmosphere of divorce proceedings.
If both spouses own the business, they might want to continue doing so even if the marriage ends. On the other hand, one person may agree to sell to the other if this happens. If just one spouse is the business owner, that individual may want to establish that the business is separate property. This would mean that what can be an expensive valuation process can be avoided during a divorce. In other situations, the owner may want his or her spouse to be able to claim a part of the company’s value, which also can be specified in the agreement.
A company’s organizing documents can also establish that the business is separate property. If a valuation process is necessary, having thorough and accurate financial records can make it smoother.
For some couples, it might seem simpler to sell the business and split the proceeds. However, this can lead to complications as well. A valuation will still be necessary. There could be delays if the market is not right for selling, or the business is in a downturn. A similar issue could arise if the couple wants to sell their home. Attorneys may be able to assist in reviewing all the options within the larger picture of property division and reaching a solution.