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Geneva family law attorneyDivorce is complex; however, dividing property is often most complex aspect of a process that can take a long time. Nowhere is this better illustrated than in the procedure for valuing and dividing a family-owned business. Between personal preferences and the market rates, dividing the value of a business will often create the biggest issues during the process.

Valuation Basics

As one might imagine, Illinois courts only have the ability to divide marital property during divorce proceedings. A family business qualifies as marital property if it is run by both spouses or if one spouse owns a controlling interest. The rationale is that the spouse working there will bring home paychecks earned by improving the business’s value. If the business is deemed marital property, it will be valued so that it and the couple’s other assets can be divided equitably.

Kane County divorce attorneyDivorce is complex; however, dividing property is often the most complicated aspect of a process that can take a long time. Nowhere is this better illustrated than in the procedure for valuing and dividing a family-owned business. Between personal preferences and the market rates, dividing the value of a business will often create major issues during the proceedings.

Valuation Basics

During a divorce, Illinois courts only have the ability to divide marital property. A family business usually qualifies if it is run by both spouses, or if one spouse owns a controlling interest—the rationale is that the spouse working there will bring home paychecks earned by improving the business’s value. If the business is deemed marital property, it must be valued so that it and the couple’s other assets can be divided equitably.

division of property, divorce, Illinois Family Law AttorneyDivision of property is often a major concern for divorcing couples. As an equitable distribution state, however, Illinois law requires that each spouse receive an appropriate, but not necessarily equal, share of the marital property based on the circumstances of the marriage and divorce. There are a number of methods which may be used to divide property and the right one for a given situation generally depends on the specific assets to be distributed and their appraised value. In some cases, a structured settlement may be appropriate.

Liquidity of Assets

Establishing the value of particular assets may be fairly easy or rather complicated depending on their nature. Goods and property, such as a piece of artwork or real estate, and accounts, such as savings or certificates of deposit, can be valuated with a degree of certainty, as such assets could be converted to cash relatively easily. Others, such as the family home, a business owned by a spouse, and long-term investment or retirement accounts may require an actuary or other financial expert to calculate their actual and anticipated value. Many of these type assets are considered nonliquid or illiquid, as they are not easily converted to cash for equitable distribution.

business valuation IMAGETen years into the marriage, your spouse comes to you tired and cranky and declares that he wants to start his own business. You know you look surprised on the exterior but on the interior your stomach is doing somersaults.

He explains that he is tired of working for someone else and padding the pockets of an unappreciative tyrant. He knows he can be successful in his own adaptation of his career choice. Trying not to hyperventilate you squash your feelings of nausea and try to smile supportively.

He continues to verbalize his business plan while you calculate the monthly budget and balance of each child's college fund in your swirling mind. What were those vows, for better or worse?

Russell Wasendorf used to be the CEO of the Peregrine Financial Company, based in Cedar Falls, Iowa.  He was arrested for scamming over 24,000 customers for over 20 years for around $215 million. He wasn't caught by regulators until he left a suicide note admitting to his crimes but managed to live through his suicide attempt.  He was sentenced to 50 years in prison for embezzlement on January 31st.

The money went to various extravagant purchases such as a private plane and a luxury Chicago apartment.  He also used the money to try to keep his failing business afloat while opening a $24 million office in Cedar Falls.  Recently, it was found that some of the money was used to divorce his wife of 24 years, Connie Wasendorf.

The divorce was finalized on December 30, 2010.  A day later, Wasendorf transferred almost $2.5 million dollars from a company account into his ex-wife’s account.  Wasendorf also paid his wife $20,000 a month for over a year from the company’s account even though she did very little to earn it.

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