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Dividing Ongoing Business Operations In Dissolution of Marriage Proceedings
If one or both spouses, going through a divorce, have ongoing, profitable business operations, in general, efforts should be made to preserve those business operations.
If at all possible, in terms of division of marital assets, instead of selling economically viable operating concerns, there could be staggered buyouts or loans as opposed to selling any profitable business.
By staggered buyouts, there could be lump-sum and/or settlement payment arrangements, with interest, whereby the party keeping any business operations would pay the spouse a set amount over a period of time as opposed to selling business operations, to raise cash.
In terms of loans, ongoing business operations may be able to obtain loans from financial institutions and there could be loans to one or both of the parties that would allow for cash to be paid as settlement of the dissolution of marriage, with the loans then being repaid by the owner of the business, as opposed to the business having to be sold, to pay a divorce settlement.
Further, if a business were sold to pay a divorce settlement, there could be adverse tax consequences with respect to which it may be in the interest of both spouses to attempt to avoid including in order to increase the value of the potential marital estate to be split between the parties.
With staggered buyouts and/or loans, adverse tax consequences could be avoided and therefore there would be more of a marital estate to divide between the parties.
Spouses can file for a no-fault divorce in Illinois, as long as they have lived separate and apart for at least two years and state that irreconcilable differences ended their marriage. This two-year separation period may be waived "upon written stipulation of both spouses, filed with the court."
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