Going into business for yourself as an educated professional can be a thrilling, if nerve-racking, decision. You get to set your own hours, choose your own clients and control how you run your company.
Your professional practice allows you to keep more of the money that you generate, rather than only taking home a fraction of the revenue because of an employment arrangement with a company. Of course, there are downsides to having your own professional practice. You are usually the one who has to make all of the difficult decisions.
There will also be more questions and uncertainty when you decide to divorce as someone who owns their own professional practice. Is the business you have built vulnerable to claims by your spouse?
Is your professional practice marital or separate property?
The most important question to ask yourself about your business is whether the Illinois family courts will see it as separate property that you own by yourself or marital property that your spouse also has a claim to.
Whose name is on the front door of the business or the ownership paperwork for the company won’t be the deciding factor. Instead, the courts are going to look at when you started the company and what resources you use to fund and build the business.
If you already had a flourishing tax practice when you fell in love with your spouse and have always maintained the careful financial separation of your personal assets and the business, it may be separate property. However, if you started it after marriage or if you have used marital property to invest in the company, your spouse may have a claim for some of its value in a divorce.
Protecting your business can be a cornerstone of your divorce strategy
Some people don’t mind continuing to work with their ex after a divorce. Many others want as clean of a break as possible. That might include severing as many social and financial ties as possible.
Keeping the business may be your priority in your upcoming divorce. If that is the case, you will need to discuss that desire with your attorney and integrate it into your strategy. You may find that negotiating your own terms outside of court will help you secure the outcome that you want.