Illinois Divorce When There Is A Business – Ten Things To Know

This post is inspired by a conversation I had with a friend in another state who was asking my opinion about their divorce. I could not give them legal advice as we only help with Illinois divorce cases. But what they were going through is relevant to anyone in Illinois who is going through a divorce involving a business.

In this case, it is a husband who is a doctor and a wife who gave up her career to support him for over 20 years, including working at the practice he founded after they got married along with raising the kids. I thought it would be helpful to talk about what legal advice I would give if you are the spouse who owns the business as well as if you were the supporting spouse.

So in no particular order, here are key things to know if you are going through a divorce with a business in Illinois. These are tips to not only help you find the best divorce lawyer possible, but also to understand how these cases actually work.

1. When was the business started – The first thing an Illinois divorce attorney will look at is was the business started. If it was before the marriage, then it is likely not a marital asset. The earnings will be relevant for other reasons, but your spouse would not have an ownership claim. On the other hand, if it was started after you got married, then it is a marital asset.
2. What happens when you join an existing business after you got married? – This is really common. Think of a lawyer becoming a partner in a law firm or a doctor joining an established medical practice. What is relevant is the date you became an owner in that business. If you were married then, it’s a marital asset.
3. Not every attorney can handle a divorce with a business – While some businesses are small and do not have a lot of assets if any, if it is a successful business, you need an attorney in your corner who is experienced with forensic accounting. That means they know how to evaluate what a business is worth as well as expert accountants who can assist in the process. If your attorney has not handled dozens of similar cases it could cost you a lot of money, potentially millions.
4. Compensation is usually given for your spouse’s ownership in the business you work at – The easiest example to think of is the spouse of an attorney at a big Chicago law firm. Let’s say a forensic accountant determines that attorney’s partnership share is worth $3,000,000. That means the other spouse can claim an interest of $1,500,000.00. There are various ways this could work out, but it is common for the non-working spouse to get paid either via a loan or being given other marital assets. For example, if you live in a $2,000,000 house that is paid off, each spouse would have a million dollar interest. Waiving rights to the home could help compensate the value of the business.
5. None of this takes away from other Illinois divorce issues – If you have been a stay at home mom (or dad) for the marriage and gave up a career, you are likely entitled to maintenance benefits (commonly thought of as alimony). Even if you get paid your ownership percentage in the business, you can still receive compensation for the lifestyle you have grown accustomed to. In other words, if a doctor making seven figures wants to get a trophy wife they can, but the first wife will not lose out completely. They will be entitled to a percentage of ongoing income in most cases. There is also child support and division of other assets.
6. If one spouse makes much more than the other, that spouse will likely have to pay for both lawyers – This is to prevent the person who makes more money bullying their spouse financially. So if your spouse has a car dealership and you have never worked or if you make significantly less than they do, most likely a divorce Judge would order them to pay your attorney fees too. This is usually the first motion your lawyer will file.
7. Neither of you is the Judge – Bullying is really common in Illinois divorces and seems to happen even more so when there is a business involved. It could be one spouse saying that the other can’t see the kids. It could be the bread winner threatening their spouse financially or even trying to cut off access to bank accounts. Courts do not look kindly on this type of behavior. Court is also your solution to stop the bullying. The best thing I can tell you is do not take legal advice from your spouse. They may tell you what is going to happen to try and intimidate you, but a strong attorney can level the playing field and protect you.
8. These divorces can take longer than ones without a business– That is because the key factor is valuing what a business is worth. Sometimes there are people who do not keep honest financial records and hide cash. Other times we might be waiting for a development that could drastically increase or decrease what the business is worth. Think of a company that has a patent for a new medicine and they are trying to bring it to market. Or a brand new restaurant or other startup. Those businesses might explode and be worth a lot or they might go bankrupt.
9. Too many attorneys overcharge in these cases– Illinois divorces involving a business can be complex. The attorneys who are truly experienced with this usually have a high hourly rate. That is legitimate. What is not legit is some of them try to use these cases as cash registers and drastically overbill their clients. Maybe they bill for research that is not really needed. They will assign multiple attorneys to show up at court when only one is required. They will charge you for reviewing an email or having a phone call in an amount much greater than the time it actually took. I have heard of lawyers billing for thinking about a case! My strong advice is that you should closely monitor the bill and demand monthly itemized statements. Do not get too far down the road where you suddenly owe $100,000 and feel like the true value is less than half of that.
10. All of these case issues are negotiable – When you hire an Illinois divorce lawyer, they should talk to you about your goals. Some people care about child custody over everything else. Others want to get the case done quickly so they can move out of state. Some prioritize the value of a business. Talk to your attorney about what is important to you so they can work to meet as many of your goals as possible. They can not change the law, but if they understand what matters to you, they can work to get you the best outcome attainable.

We have helped tens of thousands of people who are going through divorce in Illinois. Our service based out of Chicago and we have a network of top, experienced family law attorneys in Cook County, Lake, DuPage, Kane, McHenry and Will Counties. If your case is there and you would like a free, confidential consultation, please contact us at 312-346-5320 any time.