Businesses & Divorce
X

Naperville

Oak Brook

Burr Ridge

Lake Forest

Business and Divorce Attorneys in DuPage County

Naperville, IL Business and Divorce Lawyers

In many relationships, a jointly-owned business may be the family's primary, or solitary, income source. During a divorce, the two most significant issues are typically professional goodwill and business valuation. The earnings must be divided as part of the property settlement; goodwill must be properly categorized as marital or non-marital property; and a market value must be established.

At Pesce Law Group, P.C., we understand that these businesses have emotional value in addition to their financial value. We take the time to listen to you and learn more about your goals and aspirations in a particular situation. Afterwards, we take prompt and sustained action to protect your legal and financial rights, both inside and outside the courtroom.

Business Goodwill

A business' reputation in the community, and more importantly, among its customers, may be its largest asset. To properly add value to the business for divorce valuation purposes, that goodwill must be properly classified.

  • Enterprise Goodwill: Some businesses, especially franchise businesses, have goodwill that stems from the name itself. For example,most customers do not eat at a certain chain restaurant because of the owner's name. In these situations, the goodwill is considered part of the marital estate.
  • Personal Goodwill: Especially in service or professional enterprises, like a law firm or a hair salon, goodwill may stem from the owner's name. For example, if Husband no longer operates Husband's Barber Shop, existing customers may leave. In these instances, the business goodwill is non-marital property.

Personal goodwill can be considered future income earning ability, so it is often a factor in a maintenance award, if not the overall property division.

Business Valuation

Illinois courts generally use one of three basic models to determine business value:

  • Market Approach: Much like "comparables" in a real estate sale, this approach looks to the recent purchase or sale of similarly-situated businesses.
  • Asset Approach: As the name implies, this method looks only at the company's fixed assets. Since it ignores cash flow and intangible assets, this approach is not appropriate in many situations.
  • Income Approach: The is method is essentially the opposite of the asset approach, and the business' income over a set period of time is the determining factor in its value.

Other Issues

If the parties jointly own the business, as is often the case, the court will determine whether the now ex-spouses can continue to operate it, or whether the business should be sold. The law regarding business valuation is constantly evolving, so your attorney should be fully informed of the latest developments.

At Pesce Law Group, P.C., our professionals regularly attend seminars and other continuing education events. Contact us today at 630-352-2240 for a free consultation. We serve families in and around DuPage County.

Contact Us

NOTE: Fields with a * indicate a required field.
*
*
*

RECENT DIVORCE & FAMILY LAW NEWS

The Illinois Non-Support Punishment Act
The Illinois Non-Support Punishment Act
Under Illinois law, every child has the right to support from his or her parents, regardless of marital situation or whether or not they were born in wedlock. If this support is not paid, the state takes it extremely seriously, because it is a public...
Continue Reading...
Child Abduction and Parenting Time Compliance Violations
Child Abduction and Parenting Time Compliance Violations
For most parents, losing their children is one of their worst nightmares. If it happens as a result of the actions of your former spouse, it can arguably be worse. Most people think of kidnapping or abduction as a drawn-out, premeditated plan that can span...
Continue Reading...
Adopting Your Stepchild in Illinois
Adopting Your Stepchild in Illinois
Adopting a child is a process that will necessarily be slow, so as to ensure that potential parents are fit to have such a responsibility. However, when the adoption is necessary due to a parent’s remarriage, the process can go noticeably faster, assuming the pattern...
Continue Reading...
AVVO COLLABORATIVE LAW INSTITUTE OF ILLINOIS SuperLawyers IACP DCBA Illinois State Bar Association Leading Lawyers Network