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Prenuptial Agreements for Business Owners

 Posted on May 07, 2024 in Business and Divorce

IL divorce lawyerIf you have worked hard to start your own business, you have every right to want to protect the fruits of your labor. Even if you owned the company in your own name before you got married, your company’s assets or profits can easily become marital property in the absence of a legally binding agreement that says otherwise. People who were business owners before getting married and saw their businesses grow during their marriages have lost some of the increased value during divorce. You can use a prenuptial agreement to establish your company as your own separate property in case your marriage ends in divorce. A Naperville, IL prenuptial agreements attorney can draft a fair agreement that protects your company.

How One Spouse’s Business Becomes Marital Property

Under Illinois’s marital property laws, most assets gained during the marriage by either spouse are the property of the marriage. While your company itself might stay your separate property because you had it before you were married, any increase in your company’s value during the marriage might be considered marital property. This is because both spouses are said to contribute to each other’s careers and earning potential, even if that contribution is indirect.

If your spouse, for example, took care of the children in the evenings or cooked dinner to make it easier for you to work late while you were building up your business, that domestic labor is considered a contribution to your ability to make your business more profitable. This could mean that your spouse has a claim to the difference between the premarital value of your business and its value at the time of divorce.

How a Prenuptial Agreement Can Help 

You and your spouse can make a legal agreement setting aside certain property for each of you in the event of a divorce. Business owners often create provisions designed to protect companies they owned prior to the marriage. You can state that you alone own your company and your spouse should not be entitled to a share of its profits or assets if you get divorced.

However, if your business is the marriage’s sole or primary source of income, you may not be able to entirely block your spouse from claiming some interest in its profits should you get divorced. If depriving your spouse of any interest in the company would leave him or her with no means of support, you might still need to pay alimony. The marital property you used your business’s income to build up may also still be part of your marital estate, which your spouse may keep some share of.

Contact a DuPage County, IL Prenuptial Agreements Attorney

Calabrese Associates, P.C. can help you designate your business as your separate property. Our experienced Naperville, IL prenuptial agreements lawyers are skilled in working with business owners. Contact us at 630-393-3111 for a confidential consultation.

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