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2025 Divorce Law Changes Impacting Entrepreneurs in Illinois

By Leslie Fineberg on September 22, 2025

For entrepreneurs in Illinois, divorce has always required careful legal and financial considerations. But with the 2025 legislative updates to Illinois family law, the stakes are even higher.

Changes affecting asset division, parenting time, and maintenance calculations are particularly impactful for business owners. If you’re a founder, executive, or investor, understanding these reforms is essential for protecting your interests.

Illinois Divorce Law Reforms

Several new measures have been signed into law as part of the broader Illinois business divorce reform. These include significant updates to:

• Maintenance guideline formulas
• The process for startup valuation and asset distribution
• Parental rights and parenting time allocation

Each of these areas affects how professionals and entrepreneurs approach divorce, especially those with growing businesses, shared ownership interests, or children from the marriage.

Maintenance Guideline Updates

Illinois courts use statutory formulas to determine spousal maintenance (also known as alimony). As of 2025, these formulas have been revised to better account for variable income—a common feature of entrepreneurial compensation.

Key Maintenance Changes Include:

• Capped Support Based on Net, Not Gross, Income: The formula uses adjusted net income to reflect business-related deductions.
• Timeframe Flexibility: Judges have increased discretion to adjust the duration of maintenance based on nontraditional earning paths, such as income spikes during venture exits.
• Temporary Income Events: Courts may exclude one-time liquidity events (e.g., selling shares in a startup) from long-term maintenance calculations.

These maintenance guideline updates help protect business owners from disproportionate support obligations triggered by temporary earnings.

New Framework for Startup Valuation

Illinois legal reform has introduced clearer standards for valuing startups and closely held companies. This is important when it comes to equitable property division, particularly in high-growth, early-stage companies.

Key Features of the New Startup Valuation Guidelines:

• Discounted Cash Flow and Market-Based Multiples: Courts are encouraged to apply both income and market approaches to arrive at a reasonable valuation.
• Valuation Date Standardization: Valuations are now based on the date of filing for divorce, rather than the trial date, preventing valuation inflation due to growth during litigation.
• Consideration of Sweat Equity: If one spouse founded the company, courts now consider their non-monetary contributions and effort during the marriage.
• Limitation on Double Dipping: Entrepreneurs will not be penalized by having business income counted both as an asset and a source for maintenance.

These updates offer predictability and fairness, particularly in volatile or evolving sectors such as tech, healthcare, and financial services.

New Parental Rights Allocation Law

As of January 2025, Illinois has enacted a new parental rights allocation law aimed at modernizing parenting time arrangements. This law emphasizes shared decision-making and flexible parenting schedules, aligning with the realities of professional and entrepreneurial lifestyles.

Highlights of the Law:

• Presumption of Shared Parenting Time: Courts will start with a baseline assumption of equal or near-equal time, unless evidence supports otherwise.
• Tailored Schedules for Travel and Flex Hours: Entrepreneurs who work irregular schedules can request custom parenting plans that reflect professional commitments.
• Electronic Communication: Virtual visitation and communication tools (e.g., video calls, messaging apps) are now explicitly recognized in parenting plans.
• Enhanced Parental Relocation Standards: The law clarifies how and when a parent may relocate with a child, considering business relocation or remote work opportunities.

This new parental rights allocation law gives professionals more tools to protect both their parenting relationships and their business responsibilities.

Strategic Considerations for Entrepreneurs in Divorce

Business Appraisal Timing and Methodology

Early-stage startups often fluctuate in value. Under the new rules, engaging a qualified business appraiser at the outset is critical. Entrepreneurs should gather:

• Cap tables
• Historical and projected financials
• Founders’ agreements and investor contracts

Choosing a valuation method that reflects the company’s unique growth model could make a big difference to your bottom line.

Negotiating Maintenance from a Variable Income

With income tied to business performance, the new maintenance guideline updates allow for more nuanced negotiation. Entrepreneurs can:

• Propose tiered or adjustable support agreements
• Highlight reinvested profits and delayed compensation
• Emphasize non-liquid equity holdings

This approach ensures that maintenance obligations reflect true income capacity, not just paper valuations.

Preserving Confidential Business Information

With startup valuation and income disclosures playing a central role in divorce proceedings, confidentiality is paramount. Protective orders and limited document sharing can shield proprietary data from public court records or competitor access.

Leveraging Collaborative Divorce

Collaborative or attorney-assisted negotiation is increasingly attractive for professionals navigating divorce without litigation in Illinois. This alternative dispute resolution method keeps sensitive financial and business information out of court, fostering customized agreements that protect your company and your family.

Case Example: Divorce and a High-Growth Startup

Consider a Chicago-based tech entrepreneur in the midst of scaling their SaaS business. Under the previous law, a 2024 valuation might include projected revenues well into 2026, potentially inflating the marital estate. Under the new rules, the value is frozen as of the divorce filing date, and only realized income is considered for maintenance, instead of speculative growth.

This change means:

• Fairer asset division, recognizing that future success post-divorce belongs solely to the founder.
• Maintenance payments that don’t overestimate earnings based on temporary metrics.
• Greater clarity in negotiations, reducing time in court and legal expenses.

How We Can Help

Nottage and Ward, LLP understands the unique challenges faced by business owners and professionals when facing divorce. That’s why we stay ahead of the curve when it comes to monitoring Illinois legislative developments to help our clients make strategic decisions.

Our Approach Includes:

• Advising on startup valuation methods and coordinating with financial experts
• Structuring maintenance proposals in line with updated guidelines
• Crafting parenting plans that support business travel and flexible hours
• Utilizing collaborative divorce and other ADR techniques for private, efficient resolution

We vigorously defend our clients, always aiming for outcomes that preserve the health of your business.

Speak With a Trusted High-Assets Divorce Lawyer in Chicago

Don’t let outdated assumptions or rigid legal strategies jeopardize your business. Let the experienced team at Nottage and Ward, LLP guide you through the divorce process.

We bring over 35 years of experience to the table, and our divorce and family firm is listed by Martindale-Hubbell in its Bar Register of Pre-eminent Lawyers.

Call our Chicago divorce attorneys at (312) 332-2915 to learn more today.