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How Your Divorce May Affect Your BusinessGoing through a divorce can be perilous for your business, particularly if it is a smaller, family-run business. Some owners have seen the value of their business drop or lost control of it because of the consequences of the divorce process. It is important to work with your divorce attorney on protecting your business during the divorce and allowing it to thrive afterward.

Marital Property

You may need to fight for ownership of your business during your divorce negotiations. Your business is marital property if you created it during your marriage or used marital assets to invest in it. A business that predates your marriage can be nonmarital property, though the amount that the business increased in value during your marriage can be a marital asset. You have several options when your business is part of the equitable division of property. You can:

  • Have complete ownership of the business in exchange for other marital assets of equitable value;
  • Co-own the business with your former spouse after the divorce;
  • Split your business into two companies that you own separately; or
  • Sell your business and divide the proceeds.

The option you choose may depend on the size of your business and how involved your spouse is in it. Your spouse may be content to let you keep the business if he or she is not part of it. A spouse who helped create and run the business may be unwilling to give up his or her business ownership without ample compensation. However, co-owning or dividing a small business may be impractical, and selling your business means losing your source of income.

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How Winning the Lottery Would Affect Your DivorceWinning the lottery is not something that you can plan for, but how you respond to winning is important if you are going through a divorce. You must first determine whether your spouse is entitled to a share of the winnings as part of the division of property in Illinois’ divorce laws. If your winnings are completely your property, your sudden influx of money will still affect how you settle your divorce. What you cannot do is hide the fact that you have won.

Property Status

Whether your lottery winnings are marital property in a divorce depends on when and how you purchased the ticket:

  • Your lottery winnings would most likely be marital property if you purchased the winning ticket before you started the divorce process. Your individual income is marital income during your marriage, and purchases made with marital income are marital property; and
  • Your winnings could be individual property if you purchased the ticket while separated from your spouse but before your divorce is completed. You would need to prove that you paid for the ticket with your individual income.

Illinois law states that spouses must equitably divide their marital properties during a divorce. Your spouse would not necessarily receive exactly half of your prize money. Instead, he or she would receive what the court believes is a fair share of the money, depending on the duration of your marriage and his or her financial situation.

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Five Mistakes to Avoid in High Asset DivorceDivorcees with high-value assets follow the same laws as everyone else getting a divorce. The difference is that wealthy individuals have more at stake in terms of finances. The process of dividing up their assets is often more complicated because the assets are numerous and diverse. Whether because of miscalculation or emotion, making a mistake can cost thousands or millions of dollars. Individuals in a high asset divorce must take care to avoid these mistakes when dividing up their marital properties:

  1. Hiding Assets: With the prospect of losing several valuable marital properties, a divorcee may try to protect them by purposely hiding them or failing to disclose them. Common tactics include creating hidden accounts or temporarily transferring properties to a friend. A divorce court may penalize a party who has been caught trying to deceive a spouse. The guilty party may be forced to compensate the other spouse by giving up marital assets or money.
  2. Incomplete Investigation: A spouse can be held accountable for hiding assets only if the other spouse catches him or her. Failing to thoroughly search for marital assets puts a spouse at a disadvantage. The identified properties may be divided equitably, but having hidden properties means one spouse is receiving an inequitable share. If a spouse learns about the hidden assets after the divorce is completed, he or she is responsible for providing evidence of the deception.
  3. Undervaluing Assets: Once spouses identify all of their marital assets, they must put an accurate value to each asset. Complex properties, such as businesses or investments, are common in high asset divorces and difficult to assess. One spouse will likely maintain complete control of the business, while the other receives equitable compensation. When assessing a business, assessors must determine both its current and future value.
  4. Forgetting Tax Obligations: Not all marital properties are treated equally in terms of taxes. Some properties, such as real estate, are subject to additional taxes. After taxes are taken out, a once-equitable division of property may seem more uneven.
  5. Giving in to Emotions: Rich or poor, couples are likely to feel some bitterness towards each other during a divorce. This may cause parties to make decisions based on spite, rather than what will benefit themselves. With high asset divorces, there are more opportunities to try to punish a spouse by obstructing his or her efforts to receive an equitable share of properties. Vindictive actions do not help negotiations and needlessly prolong the process.

Settling a High Asset Divorce

A divorce that includes several valuable assets requires an experienced and knowledgeable divorce attorney. A DuPage County divorce attorney at Calabrese Associates, PC, can properly identify and assess your marital properties. Schedule a consultation by calling 630-393-3111.

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