Illinois couples who own a business together may not think about their marriages coming to an end, but a prenuptial agreement or a buy-sell agreement might protect that business in such an instance. However, since some people may want to avoid discussing the possibility of divorce, couples may have no plan in place about how they will divide their business.
One option may be for one to buy out the other. People who lack the liquid assets for doing this might be able to get a bank loan. A property settlement note is another type of loan that is for the long term and includes interest. One potential hurdle may be getting a valuation for the business because this can be expensive and time-consuming. A couple could also continue to run the business together. If the divorce is amicable, this could work as a solution. However, spouses should create a shareholder agreement that allows one to buy out the other.
The couple might also decide to sell the business and split the proceeds. The potential pitfall here is that the business might be difficult to sell quickly. As a result, a couple may be forced to maintain financial ties with one another long after the divorce.
Before deciding what to do with a business owned with the other spouse, people might want to think about their long-term goals. For example, they might decide they want the security of an income from the business without being involved in its day-to-day operations. One might have spent most of their time and energy on the company while the other spouse was indifferent to it. Spouses might also be in conflict about what to do with the business, and mediation might be one path to a solution.