Can a Professional Practice Be Considered Marital Property in Illinois?

Few aspects of divorce are more challenging than the division of marital property, and few concerns can complicate the division of marital property more than ownership of a professional practice. The matter of whether or not the practice is marital property and, if so, how it will be addressed in terms of property division is critical, and ensuring that your financial rights are protected requires the professional legal guidance of an experienced Illinois property division attorney.

The Professional Practice

If one of you is a professional with a thriving practice, the asset is not only valuable but is also complicated in relation to the division of your marital property. Unless you owned the practice prior to marriage and directly addressed the matter of ownership and division upon divorce in a valid prenuptial agreement, the asset will very likely be considered marital in the eyes of the law for the following primary reasons:

• Any increase in the practice’s value over the course of your marriage is a marital asset.
• Running the practice is the professional spouse’s contribution to the marital finances and cannot be deemed separate. 
• Any contributions the other spouse makes to running, maintaining, or growing the practice weakens its separate nature – as do any financial contributions that flow from marital assets. 

Ultimately, it’s highly unlikely that an entire professional practice would be considered a separate asset. If the professional practice was acquired during the marriage, it is a marital asset – unless it’s specifically addressed in a valid postnuptial agreement.

The Division of Marital Assets in Illinois

In an Illinois divorce, marital assets are divided between both parties in a manner that is considered fair, given a range of applicable factors. When it comes to a professional practice, factors like the following are most likely to play a pivotal role:

• The contributions the other spouse made to the marriage, including those related to raising the children and to homemaking
• The contributions the other spouse made to the education or to the success of the spouse who runs the professional practice. 

Valuing the Professional Practice

Elemental issues when it comes to assessing a professional practice’s value in divorce include the following:

• The practice’s fair market value, which can become a sticking point in and of itself
• The degree to which the practice is expected to appreciate or depreciate over time
• The tax obligations of the practice
• The value of the real estate that houses the practice – if owned
• The value of any equipment employed by the practice – as applicable

Establishing a fair value that both spouses can agree upon can prove to be a major hurdle, and the issue of how to compensate the other spouse is similarly challenging. 

Turn to an Experienced Chicago Property Division Attorney Today

The Chicago property division attorneys at Arami Law, Inc., are well acquainted with the complications that arise regarding ownership of professional practices and are well prepared to skillfully defend your related financial rights. For more information, please don’t delay contacting us today.