When business owners in Illinois decide to divorce, they could face even more serious financial consequences than people with other types of jobs. Many more people are exploring their potential through entrepreneurship and startup firms, especially in the tech sector. However, these small, closely held businesses can easily develop into a major marital asset. This is one reason why some investors require the startups they invest in to show that all the owners have signed prenuptial or postnuptial agreements that exclude the business from being divided in a divorce.
Divorce is almost always a costly process that involves some painful financial choices during property division. However, people can restructure their finances and support themselves to move forward. When a business is involved, the subject becomes more complicated. In some cases, the company may be divided between the spouses. Neither person may have the funds available to execute a buyout agreement, and both spouses may try to hang onto the company. This kind of conflict could lead to the sale of the business entirely. In some cases, it could have even worse outcomes when the firm suffers as a result of the owners’ conflict.
When a business is a partnership involving people outside the marriage, it can protect everyone to prepare for one partner’s potential divorce. A buy-sell agreement could be put in place that directs the remaining partners to buy out the person who is getting a divorce. It would set a price for the purchase, and that payout, rather than the company itself, would be dealt with during asset division.
Divorce can always come with serious financial concerns, but these can be multiplied when a business is involved. Company owners may consult with a family law attorney about how they can reach a fair settlement on divorce matters, including property division and spousal support.