Can a Prenuptial Agreement Protect My Business in Illinois?

 Posted on April 26, 2022 in Divorce

If you or your future spouse own a business, you know the hard work and dedication it takes to be an owner. As you are approaching your marriage, you may have questions about the impact that getting married  may have on your business. To protect your business’ assets and clearly and legally establish what is and is not marital property, you and your spouse may choose to sign a prenuptial agreement. No one wants to think about divorce before they are even married, but having a prenuptial agreement in place, especially when a business is involved, can provide peace of mind and establish a clear understanding of your finances. 

Signing a prenuptial agreement is not a predictor of divorce. As the average age of wedded couples grows older, and more assets are often brought into the marriage, it can be a good way of knowing each other's assets and debts. This can help avoid arguments about finances later, which are a leading cause of divorce. Both parties should be as upfront as they can during the preparation of a prenuptial agreement. During the divorce process, the agreement can be thrown out by a judge if, for example, one of the parties hid assets from the other, or if one spouse felt coerced into signing the agreement. 

With regard to a business, you will likely need to get a formal valuation of it for the purposes of a prenup . Typically, if a business was started before the marriage, it is usually considered non-marital property. A prenuptial agreement may also still be a good idea if you will be going into business together, or if one spouse will be doing work at the business of the other, because even if you started the business before the marriage, without a prenup, the business  might later be considered partially or even fully marital property. A prenuptial agreement can also be used to specify each spouse’s share of the business's assets and liabilities, as well as how any appreciation would be divided  in case of a divorce. While Illinois is an equitable distribution state–marital assets are divided equitably between the parties, not equally–it can still be beneficial to both spouses to agree upon a split upfront. 

Work With a Hillside Prenuptial Agreement Lawyer

To remove uncertainty from a marriage when a business is involved, it may be prudent to discuss a prenuptial agreement with your future spouse. The Oak Park Family Law attorneys of Law Office of Vincent C. Machroli, P.C. can help explain your options, and develop a mutually-agreed-upon prenuptial agreement for you. Contact our office at 708-449-7404 for a free consultation. 

Sources:

https://www.forbes.com/sites/frawleypollock/2019/07/20/how-a-prenuptial-agreement-can-help-protect-your-business-interests/?sh=460aff6f4f94

https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2087&ChapterID=59