Ryan Family Law, P.C.
Ryan Family Law, P.C.

Elgin, Illinois

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Reaching an agreement about a business in a divorce

When Illinois couples who own a business get a divorce, they must decide whether they will sell it, continue running it together or have retain ownership together with just one of them as the primary operator. The first option is common since it can be difficult for people to continue working together after a divorce. However, when this approach is used, it is important for the person who is leaving the company to be indemnified against any future claims related to it.

In some cases, both people may enjoy running the company or may anticipate a significant profit from it in the future. In this situation, the couple may need a buy-sell agreement in place to help ensure neither person is left with an illiquid ownership share.

It is not uncommon for one person to want to leave the business but for there to be insufficient liquidity for this to happen. In this case, one person will continue to run the business while the other takes a more inactive role. However, the person who does not have an active role in the company should still be granted certain veto rights to help ensure that the nature of the business does not fundamentally change.

There may also be situations in which the couple agrees that they will sell the business and split the proceeds. However, even if this is the case, unless the business sells immediately, they still must determine how it will be run until the sale happens. They may face a similar situation with a home. One person may lack the liquidity to buy out the other, and the home might not sell right away. As part of their negotiations over property division, they may also need to decide who will pay for expenses associated with it until it is sold.

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