By Joshua E. Stern, Principal and Managing Partner, Divorce and Family Law Attorney

I recently wrote a blog about premarital assets in a high net worth divorce with a focus on how marital labor plays a role in the expansion of a premarital business. As part two of this series, I’m going to cover premarital partnerships and investments. This is a tricky subject and, similar to part one of this series, often boils down to how the asset was acquired and if the income generated during a marriage is passive or active.

Examples of Premarital Investments

When talking about premarital investments, I’m referring to people with a passive investment or ownership interest. This includes standard portfolios, ownership of fractional shares of smaller or not publicly traded businesses, and partners of large firms (law, accounting, consulting, etc.) who get special compensation or perks due to their partnership status.

Analyzing Premarital Investments

To help paint a picture, we’re going to talk about a partner in a consulting firm named Ron. Ron joined the firm in 2000 and was promoted to partner in 2010. At that time, he paid the partner buy-in fee and began earning its benefits. Ron got married in 2015 and now, in 2025, is getting a divorce.

When it comes to Ron’s partnership benefits, what is his spouse entitled to? Are the benefits a premarital investment and do they continue to be classified that way? Or have they become a piece of his active income and considered part of the marital estate? As always, the answer depends — but let’s break it down.

Ron’s partnership benefits began prior to his marriage when he paid into the equity pool in 2010. So, his original buy-in is considered non-marital, and he receives the benefits based on both merit and buy-in. Ron doesn’t control the program and he has no say on what is paid out and when, which also supports a case for the benefits to remain non-marital. However, his continued participation is contingent on his current labor. If his spouse’s marital labor enables his career success, then the benefits could be classified as marital property.

We would need to determine which of Ron’s benefits are vested to the buy-in and which are solely discretionary. We’d also analyze Ron’s history of compensation to determine if it it’s fair. If so, then it’s easier to make a case that profits from the partnership benefits should remain non-marital. However, if Ron intentionally underpays himself, then the partnership benefits could contribute to creating a reasonable salary, therefore becoming part of the marital estate and fair game to his spouse. In a similar divorce case in Illinois, the court ruled, “that “distributions” or “dividends” disbursed during the marriage may be considered nonmarital property if proven not to be compensation to the spouse, that is, if proven not to be due to “the personal effort of a spouse.”

Specializing In High Net Worth Cases

Pre-marital investments are an important and nuanced topic with no cookie cutter analysis. Working with an experienced legal team that understands the complexities of high net worth divorces is essential to ensuring your assets are properly classified and protected.

If you’re preparing for a divorce and want to safeguard your premarital investments, please reach out today. I welcome the chance to meet with you at our offices in Evanston, Chicago, Lake Forest or Oak Brook. Start by requesting a free consultation or calling (847) 868-9584.

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