Is a Limited Liability Company Protected from Divorce?
If you have questions about divorcing as a small business owner, the highly-skilled family law attorneys at Conniff & Keleher are here to help. Is a limited liability company protected from divorce? Learn all about the basics of an LLC and divorce in the guide below, and reach out to us if you have any questions or would like to set up a consultation.
What is an LLC?
Establishing a limited liability company (LLC) allows business owners to take advantage of a structure that protects them from personal responsibility for the company’s debts and liabilities. Business owners are able to benefit from the tax characteristics of a corporation in addition to the organizational simplicity of a partnership or sole proprietorship.
Is a limited liability company protected from divorce? The short answer to this question is no. If the business was founded after the marriage, it is considered marital property. In some cases, a business started before the marriage can become marital property if joint funds were used for the business or the non-owning partner made contributions.
A limited liability company will be treated just like other assets and property in a divorce. Illinois is an “equitable division” state. All marital property must be divided fairly, no matter the circumstances. Before a married couple or family court judge can determine how business assets will be divided, a complete valuation of the business is necessary. The assessment will look at all of the business’ assets and debts.
Can an LLC Protect You in a Divorce?
The specifics regarding an LLC and divorce can be quite complex. Forming an LLC potentially could protect the specific assets of your business when you divorce. However, it does not necessarily protect your financial stake in the business from your spouse.
Schedule a Consultation with Conniff & Keleher
If you still have questions about divorcing as a small business owner, we recommend the assistance of a skilled family law attorney. The team at Conniff & Keleher will ensure your interests are protected. Contact us today to set up a consultation.