Valuing a Small Business During a Kane County Divorce

 Posted on June 02, 2026 in Property Division

As any small business owner can attest to, running your own company is not an easy task. This is especially true presently. Between inflation and labor shortages, many business owners are struggling to keep their businesses afloat.

Getting divorced while simultaneously running a small business is even more complicated. Business owners must determine whether their business is partially or fully marital property and address the business during asset division. To do this, they will first need to determine the value of the company. Fortunately, business owners facing divorce do not have to handle all of these complex issues on their own. 

A Kane County, IL divorce lawyer skilled in business valuation and division can provide direction and personalized assistance throughout the divorce process. At Goostree Law Group, we have decades of shared divorce experience, and we are not afraid to take on complex issues like business valuation.

Common Kinds of Small Businesses Involved in a Divorce

Many divorcing couples own a small business together. Sometimes, one spouse built or bought a business before or during the marriage. Regardless of how it’s obtained, the business has to be accounted for during the divorce process. Illinois law requires courts to divide marital property in a fair and equitable way (750 ILCS 5/503). 

Small businesses come in many forms. Some of the most common types involved in divorce cases include:

• Retail stores and shops

• Restaurants and food service businesses

• Medical, dental, and therapy practices

• Law firms and accounting firms

• Construction and contracting companies

• Trucking and transportation businesses

• Real estate investment companies

• Salons, spas, and personal service businesses

During property division, a divorcing couple may have to review the business’s assets, liabilities, and earning potential, among other factors.

Valuing a Small Business During a 2026 Divorce

Businesses can be tricky to value, but there are a few methods that divorcing business owners can use to obtain an accurate valuation. One common method is the income approach. This approach values a business based on its future economic benefits. A professional will look at the company's earnings history and project what it is likely to earn going forward.

The second common method is the market approach. A valuator will compare the business to others that have sold recently and use those sales to estimate its worth. This is often used to value start-ups and businesses that do not have a long history.

The third and final method is the asset approach. This approach simply tallies up the total value of the business's assets and subtracts any debts or liabilities. Each asset is identified and assigned a dollar value. That total is then reduced by what the business owes. This is often used for businesses with high levels of inventory or businesses that own property.

How To Handle the Value of the Business During Asset Division

Many businesses are considered marital property. This means that the business is subject to equitable distribution during a divorce. However, there are a few exceptions. Businesses that were started prior to marriage or businesses that were inherited are typically considered separate property. This means that they are not subject to asset division and remain the sole property of the spouse who owns them.

If the business is considered a marital asset, it can be divided in a couple of different ways. The first way is to sell the business and divide the proceeds among the divorcing spouses. This option may be attractive to divorcing couples with significant joint debt or those who want a fresh start. However, many business owners have poured so much time, energy, and resources into their company that selling it is out of the question. 

Another way to handle a business during divorce is for one spouse to buy out the other's interest in the business. This can be done through a lump sum payment or an installment plan. Although it is certainly difficult, some divorcing couples choose to continue running the business together.

What Is Goodwill and How Is It Factored Into a Business Valuation?

Goodwill refers to the value a business holds beyond its physical assets. It can include a strong reputation, a loyal customer base, an established location, or a recognizable brand. Goodwill is often one of the harder parts of a business to measure, but it can make up a significant portion of a company's total worth.

Illinois courts distinguish between two types of goodwill. Enterprise goodwill belongs to the business itself and is generally considered marital property. Personal goodwill is tied to the individual owner's reputation or skills and may not be divisible. A professional valuator can help identify which type applies and how much it contributes to the overall value.

What Happens if Spouses Disagree About How to Value a Business?

Disagreements about business value are common in divorce cases. One spouse may believe the business is worth far more than the other is willing to admit. When the two sides cannot reach an agreement, the dispute may need to be resolved at trial.

At trial, each spouse can present their own expert witness. Each expert will explain their valuation method and defend their conclusions. A judge will then review the evidence and decide what the business is worth. This process can be lengthy and expensive. It also means the outcome is in someone else's hands. Reaching an agreement outside of court is often the better path when possible, but litigation remains an option when no fair resolution can be reached. Our firm is prepared to fight for you in and outside of court, prioritizing efficient outcomes.

Contact Our Kane County, IL Property Division Lawyers

When your divorce involves complex or high-value assets, do not take any chances. Contact the St. Charles, IL divorce attorneys at Goostree Law Group to get the help you need. Call us at 630-584-4800 to set up your free consultation.