When parties begin to negotiate the division of their marital assets and debts, the issue of how a business interest will be treated or divided arises. Owning a business can be stressful, and often times requires years of sacrifice, so making sure that your business interest is protected, is extremely important to many business owners.  Conversely, those spouses who have supported their spouse in the growth of their business, or even have directly contributed to its value (working for the business, using marital funds to purchase items for the business, etc.), feel a sense of ownership or entitlement to the business despite whose name is on the ownership paperwork.  This begs the question, how is a business interest viewed in a divorce and am I/is my spouse entitled to a monetary value for it? 

The first question that needs to be resolved in any divorce case involving a business is: When was the business started? In order for the business to be considered a marital asset subject to division, the business must have been formed during the marriage. If you are a business owner and you know you started the business before the marriage, it’s important that you retrieve any documents that prove you started the business interest prior to the marriage, as the burden of showing that the business is non-marital falls upon the business owner. Documents such as the letters of incorporation, tax returns, or a contract showing the purchase of the business, are examples of documents that can be used to establish that your business is non-marital. Having the court declare that your business is non-marital, means that your spouse won’t be entitled to a portion of the value of the business. However, the value of the non-marital business may still be relevant as if the court finds the value is substantial, then the court may consider the value of it when determining what an “equitable” division of the marital estate will be.  For example, if you have non-marital assets in the amount of $1 million, and your marital estate is $2 million, the court may award you less than 50% of the marital assets (the division could be 60-40 or otherwise disproportionate).  

If the business interest was formed during the marriage, the next question that needs to be answered is: What is the business worth? Due to the complex nature of how a business should be valued, generally, an expert that specializes in valuing businesses should be retained to determine the value of the business. These experts often have a background in forensic accounting, business valuation, and financial consulting in order to ensure that the business interest is thoroughly evaluated.  There are many methods in which a business can be valued, including market capitalization, time revenue method, earnings multiplier, discounted cash flow, book value and liquidation value.  Which method or methods of valuation are appropriate is typically determined by the business valuation expert depending on the nature of the business.  During this part of the process, the business owner will be required to provide the expert with financial statements, ledgers, and any other documents that are relevant to the business.  Business owners are also likely to be interviewed by the valuation expert via a management interview.

In 2016, the Illinois legislature attempted to create uniformity behind maintenance awards (formerly known as alimony) in dissolution of marriage proceedings by establishing a statutory formula for its calculation.  The theory behind the change to the law was that by instituting the guidelines there would be less variation from judge to judge and county to county than there had been prior to 2016.  The maintenance guideline formula is contained in the Illinois Marriage and Dissolution of Marriage Act, Section 504, and provides for both a guideline amount and duration for spousal support, as well as a percentage cap based upon the spouses combined incomes (the recipient shall receive no more than 40% of the combined total net income).  The current statute (revised most recently in 2019) sets support based on the net incomes of each party (compared to being based upon gross income pre-2019) and the duration is based upon a multiplying factor considering the length of the marriage through the date a petition for divorce is filed.  Specifically, the award is 33 1/3% of the payor’s net income less 25% of the payee’s net income (subject to the same cap from the 2016 version).  Although the court can deviate from these guidelines when they apply, a deviation is rare and there typically needs to be a court-approved basis for doing so; such as one party having a greater capacity to earn income than evidenced on paper or a party having substantial nonmarital assets like an inheritance.  

However, the guidelines set forth in the current statute do not apply in all circumstances.  Specifically, couples with a combined gross income in excess of $500,000 are not subject to the guidelines.  So, if one party earns $450,000 per year and the other earns $80,000 per year, or one party is a stay-at-home parent and the other earns in excess of $1,000,000 per year, the court is not required to follow the guideline formula and has discretion to establish maintenance awards and set the duration of an award, presuming the court first determines that a maintenance award is appropriate under the circumstances.  

Does that mean the court will allocate a greater or smaller percentage than what the guideline formula would have resulted in? Will they use a formula at all?  The statute states as follows: “Any non-guidelines award of maintenance shall be made after the court's consideration of all relevant factors set forth in subsection (a) of this Section.”

Many individuals who are going through a divorce often start dating other people before their case is finalized. While it is great that they feel emotionally ready to take on a new relationship, there could be potential consequences to dating while also unwinding the marriage with their current spouse. Although Illinois law does not prohibit dating during the divorce process, that does not mean that dating will not present its own set of challenges for your case, especially when there are children involved. So, for those who are thinking of dating during divorce, this blog will discuss four important considerations to keep in mind before doing so.

1. The Impact Dating May Have on Your Children

If you have children, dating during divorce can be tricky and sometimes confusing for them. During the divorce process, children often need stability as it is not just a vulnerable time for you, but also for them. For many kids, the thought of their parents divorcing is a difficult pill to swallow because it raises concerns and anxiety over possible changes to their current lifestyle (i.e. which parent they are going to live with, how often they will see the other parent etc.). It can also create feelings of isolation from peers who have intact families or married parents. Therefore, introducing them to a new partner can sometimes make an already difficult time worse. It is important to be sure that the relationship is serious before introducing them to your new significant other. With that said, introducing your children to a new partner may also have a positive impact on them if your children like and trust your new significant other. 

In addition to the emotional impact dating may have on your children, you should also consider the practical consequences it may have on your divorce case. Illinois law requires that a Court allocate parenting time in accordance with the children’s best interest. When determining what is in a child’s best interest, a Court may consider how your new dating relationship affects the children during your parenting time. 

This question is commonly asked by clients and is normally shaken off by attorneys as “unlikely.” Most attorneys will tell their clients that the only way that they can recover attorney’s fees in a parentage action is if one party is held in contempt or is intentionally increasing the cost of litigation. However, the relevant case law says otherwise, and it actually allows for one party in a parentage case to seek “interim attorney’s fees” from the other. “Interim” means while the case is pending.

There are two laws at play in this issue, the Illinois Marriage and Dissolution of Marriage Act and the Illinois Parentage Act of 1984. The Illinois Marriage and Dissolution of Marriage Act incorporates the Illinois Parentage Act of 1984 in its entirety. The Illinois Marriage and Dissolution of Marriage Act refers to divorce cases while the Illinois Parentage Act of 1984 applies to parties that have never been married. This blog will give you a look at when you may be awarded attorney’s fees in your case and what kind of fees you can try and recover.

In 1997, the Illinois legislature created a new procedure for awarding attorney’s fees under the Illinois Marriage and Dissolution of Marriage Act. The legislature amended the law, which now says that “the court from time to time, after due notice and hearing, and after considering the financial resources of the parties, may order any party to pay a reasonable amount for his own or the other party’s costs and attorney’s fees. Interim attorney’s fees and costs may be awarded from the opposing party, in accordance with subsection (c-1) of Section 501.” 

While unfortunate, it is extremely common for divorce, orders of protection, and criminal domestic violence cases to be intertwined. In many situations, divorce and/or parentage cases begin with the filing of a civil order of protection, typically an emergency petition and mostly without notice to the other party. Orders of protection are governed by the Illinois Domestic Violence Act of 1986. Orders of protection protect family or household members from the actions of another. In order to obtain an order of protection, the petitioner must prove: a) that the respondent is a relative or household member, b) that the respondent has abused the petitioner, and c) that the Court has jurisdiction of the matter. “Abuse” is a broad term under the Illinois Domestic Violence Act, and is defined as: physical abuse, harassment, interference with personal liberty, intimidation of a dependent, or willful deprivation.  What classifies as abuse under these broad definitions varies case by case and is impacted by both the severity and frequency of the circumstances.

A party seeking an order of protection against a spouse, fiancé, or partner may ask the court to protect not only themselves from the other party, but also the children as well, but only if the children have been subject or witness to the abuse.  To do this, the person seeking the order of protection (the petitioner or victim) must list the children as “protected parties” and state any abuse that the children may have witness or fell victim to by the other party (the respondent or abuser).   As a remedy for an order of protection, in addition to prohibiting contact of any kind between the petitioner and the respondent, the court can also prohibit the respondent from having any contact with the minor children, suspend any and all parenting time between the respondent and the children or establish a supervised or other reasonable parenting schedule. Additionally, the court can grant the petitioner exclusive possession of the shared residence, meaning that the respondent would be prohibited from entering the residence until further order of court. The court also has the authority on a plenary order of protection to order the abuser to attend counseling and turn over any firearms. 

Although many orders of protection are civil in nature, the State’s Attorney’s Office can decide whether or not to prosecute the respondent for the crime of domestic violence as a result of any physical abuse that occurred, provided the victim wishes to press charges. If that happens, the court will set conditions of the respondent’s bond. Most of the time, those bond conditions include no contact of any kind with the petitioner and no contact of any kind with the children. Additionally, the bond conditions can prohibit a respondent from leaving the State of Illinois.