Handling the Family Business During a Divorce

 Posted on April 09, 2026 in Division of Assets

It can be very risky going into business with family. This is true of immediate family like parents or siblings; it might be even more true of your spouse. Being married to your business partner can be an incredible pooling of resources when things go well. But it can also add huge complications to property division in the event of a divorce.

If you find yourself in this situation,  a Naperville divorce attorney can help you understand how the division process will go and what you can do to protect your interests in 2026.

Is a Shared Business Marital Property in Illinois?

A jointly-owned business is often shared property in Illinois. Under the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/503), assets acquired during the marriage are generally considered marital property, regardless of whose name is on them. A business that both spouses contributed to during the marriage is almost always treated as a shared marital asset.

It's worth noting that a business one spouse started before the marriage may be non-marital property. However, unless the business owner always keeps business and personal matters separate, there will likely still be some division. Earned income from the business is usually marital property. And if both spouses put effort into the business during the marriage, courts may treat those contributions as part of the marital estate rather than from either individual. Even if the other spouse never touched anything business-related, courts will look at things like whether they put in labor that allowed the business owner to devote time to the business’s success.

Illinois courts divide marital property equitably. This means fairly based on the circumstances, not necessarily 50/50.  Other factors the court will look at include the length of the marriage and each party's financial situation.

How Is a Shared Business Valued in an Illinois Divorce?

Before any division can happen, the court needs to know what the business is worth. Business valuation is often the most contested part of a divorce involving a shared company. This is partly because different methods can produce very different numbers.

The most common valuation methods include:

• The income approach, which estimates value based on the business's earnings and expected future income
• The asset approach, which adds up the value of the business's assets and subtracts its liabilities
• The market approach, which compares the business to similar companies that have recently sold

The method used depends on the type of business. A service-based company is often valued differently from one with physical inventory or equipment. Each spouse can hire their own valuation professional (which is why disputes in this area are common). Having an attorney who understands business divorce can help you challenge a valuation that doesn't reflect the business’s actual worth.

What Happens to a Business After Divorce in Illinois?

Once a value is established, there are a few directions the situation can go. First, spouses are strongly encouraged to come to an agreement outside of court whenever possible. If necessary, courts can intervene and will make an effort to keep a business intact when possible. They understand that closing or breaking up a company can affect employees, clients, and others beyond just the two spouses.

Common outcomes include:

Buyout

One spouse buys out the other. This is the most straightforward resolution if one spouse definitely wants to continue running the business. The buying spouse either pays cash or trades other marital assets, like a share of the family home or retirement accounts, to offset the business's value.

Co-ownership

Both spouses remain co-owners. This is a more viable option than people might expect if a couple's personal relationship is reasonably civil. If both spouses have clearly defined, complementary roles in the company, continuing to work together is sometimes doable. It requires good communication skills and boundaries, but if you can make it work, both spouses can continue to profit.

Sale

The business is sold. If neither spouse can buy the other out and working together isn't an option, a court may order the business sold and the proceeds divided.

Clauses in operating agreements or shareholder agreements can spell out what happens to the company if the marriage ends. The same is true of a postnuptial agreement if you haven’t filed for divorce yet.

A postnup, in particular, is likely not a realistic option if there are already bad feelings between you and your spouse. However, courts will generally honor these agreements if they are drafted fairly and both spouses have legal representation.

Regardless, if you and your spouse have an amicable relationship, working out a plan for how you’re going to divide the business can help streamline the process and reduce the emotional and financial cost.

Call a DuPage County, IL Divorce Attorney Today

We understand that dividing a business is often emotional and complicated, and we’ll do our best to make sure that you are fairly treated during your divorce proceedings. Our Naperville divorce lawyers at Pesce Law Group, P.C. have nearly two decades of legal experience helping couples navigate property division, business valuation disputes, and the full range of issues that come with complex divorce cases. Call Pesce Law Group, P.C. at 630-352-2240 today for a free consultation.