Deciding which spouse will get the family home and other valuable assets during a divorce is not easy when two divorcing individuals cannot see eye-to-eye on the matter. Having a business asset only complicates matters in Illinois. A few tips may help business owners to safeguard their interests during a divorce proceeding.
First, if a business has more than one owner, it would be wise to ensure that the operating agreement for the partnership includes provisions protecting both oneself and one’s business partners in the event that one partner gets divorced. One of these provisions can state that unmarried shareholders are required to provide the business with a prenup. A prenup, or prenuptial agreement, is a legally binding contract that spells out which spouse would get to keep which assets if the two were to get divorced.
It is also expedient for this operating agreement to prohibit business shares from being transferred without the partners’ approval. The agreement can also prohibit transfers of shares without providing the partners with the chance to buy these shares first. This type of agreement can be used as proof of two married people’s intent to keep the disruption of a business to a minimum in a divorce situation.
The process of dividing property and assets, including business assets, during a divorce is complex, and one mistake may end up hurting a business partner or owner in the long run. Proper legal guidance may help such individuals to make informed decisions that will end up benefiting them financially. An individual in Illinois has the right to pursue a divorce settlement that best meets his or her needs both short-term and long-term.
Source: bizjournals.com, “How to protect your business in a divorce“, Patrick Yeatts, March 25, 2015