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DuPage County divorce attorneysDivorce can be a financially devastating process, especially if you are not adequately prepared. Thankfully, there are ways to protect your financial interests, even in the messiest divorce. Learn more by checking out these five financial tips for surviving your Illinois divorce. 

1. Start Saving and Financially Preparing Before You File

One of the biggest mistakes that parties can make in their divorce is failing to financially prepare for it. Most consider the cost of the proceedings, and many recognize that they will have to divide their assets. However, few recognize just how long it can take to financially recover from their divorce. Some may even be obligated to pay child support or spousal support; not preparing for this ahead of time can have serious, long-lasting consequences for the payor. 

2. Eliminate as Much Debt as Possible 

Assets are not the only thing that gets divided in divorce; parties must also divide their debt. Those with limited incomes or who assume the bulk of the debt may find it difficult to maintain their lifestyle. Furthermore, if your spouse fails to cover a joint debt, you may be held responsible for the balance - perhaps to the tune of wage garnishments. Avoid such issues entirely by eliminating as much debt as possible before you file. 

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Illinois divorce lawyersFor the past three decades, divorce rates have been on the decline for nearly every group of Americans. However, senior citizens, or those over the age of 65, are now twice as likely to divorce today than they were 30 years ago. The reasons for this phenomenon are varied, but the potential consequences can be dire. Thankfully, you can still protect yourself in a later-life divorce (dubbed the grey divorce). Learn more in the following sections. 

Later Life Divorce Can Increase Your Risk of Financial Issues in Retirement

When couples save for their retirement, they are planning on having one set of bills and living expenses. Divorce requires the parties to divide whatever assets they may have; this includes any retirement accounts and the family home. With less money to go around and two separate sets of expenses, both parties may be at an increased risk for financial issues as they head into their retirement, and with little to no working years left, they may be unable to recover.

Adult Children May Not Respond the Way You Expect

Senior citizens may assume that adult children are mature enough to handle their divorce, but they do not always respond as one might expect. Even as adults, they may experience grief over the separation of their parents. Some may even question whether their own marriage can stand the test of time. Grandchildren may also be negatively impacted - perhaps even confused by the entire situation. You may also find it difficult to separate yourself from your spouse during major holidays and family events.  

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Wheaton divorce lawyersThe marital home is often one of the more valuable assets that couples must divide during a divorce. In addition, there may be other types of real estate involved (rental properties, vacation homes, commercial buildings, etc.). Learn how most types of real estate are handled and divided in divorce by reading the following sections. You will also discover how a seasoned lawyer can help to protect your interests along the way. 

Valuation of the Property 

Properties must be valued before they can be divided. There are three basic methods that parties may use: tax assessed value, market analysis, and appraisal. Know and understand the potential drawbacks and benefits of using each method and choose the one that best fits your situation. Also, since arguments and disagreements are common, consider hiring your own appraiser if you and your spouse settle on the third and final option. It is also important to remember that any real estate tied to a business may have a more complex valuation process. Discuss the matter with your attorney to learn more. 

Determine the Amount of Equity 

The equity of a property is the portion that you and your spouse “own.” It is configured by subtracting any liens or mortgages held against the property. If taking out an equity loan, this would be the amount that a lender would use. If selling the home, it is the amount that you and your spouse can expect to see once the sale is final (provided the home sells at value). This aspect of dividing real estate can make or break your settlement - especially if one party intends to retain the property once the divorce has been finalized. 

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Illinois divorce attorneysDivorce can be a financially and emotionally trying process, even in the best of circumstances. What is more, if you are unprepared for the process, divorce could have a lasting effect on your health, sanity, and financial stability. Take proactive steps and these practical tips that can make your Illinois divorce more bearable. 

1. Find a Way to Compartmentalize Your Divorce

While the emotional aspects of divorce cannot be overlooked or ignored, they can get in the way when dealing with matters related to your children and finances. Anger and resentment can cause you to decline fair offers, and you may even find yourself using your child as a bargaining chip, despite your best efforts. Avoid such issues through compartmentalization. Handle emotions in a healthy way, outside of negotiations. Journal, find a support system, and if necessary, attend therapy or counseling. When it comes time to negotiate, focus on what is best for you, your child, and your future, rather than how you feel. 

2. Track Your Spouse’s Earning and Expenses Before Filing for Divorce 

Spouses tend to become protective of their personal and financial information once they learn of a divorce, and if they hire an attorney, they are likely to change the passwords on their computer, phone, and financial accounts. As a result, you may be unable to gather the financial information you need for your case, which can ultimately impact the amount of your settlement. Avoid this consequence by tracking and gathering documentation on all of your spouse’s income and expenses, prior to filing for your divorce. 

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Wheaton divorce lawyersAside from the family home, retirement accounts are typically one of the more valuable assets in a couple’s marital estate. When dealing with one in divorce, the valuation must be accurate and the division process must be exacting. Otherwise, the parties may be subject to lengthy delays, severe tax penalties, and a significant decrease in the overall value of their final settlement. Thankfully, all of these issues can be avoided, so long as the parties are educated about the process and have proper guidance from seasoned, competent financial and legal professionals. 

Not All Retirement Plans Are Divided in Divorce 

Though it is rare, it is possible for a retirement pension plan to be excluded from the marital estate. One example would be if the contributing party started the account prior to the marriage and has not made a contribution since that time. Contributing parties who wish to keep their retirement account intact may also choose to “buy out” their spouse by offering up other marital assets in lieu of a cut from the pension plan (i.e. trading the family home for the retirement plan). 

Qualified Domestic Relation Orders 

Qualified domestic relation orders, or QDROs, are used to divide “qualified” retirement plan assets between a contributing member and their ex-spouse. It is one of the few instances in which the plan can be divided without facing a tax penalty. However, a penalty may still ensue if the QDRO is not done, or if a mistake is made. For example, if you transfer funds directly to your spouse to help them out with money until they can get back on their feet, hefty tax penalties could ensue for you both. To avoid such matters, have a qualified team of legal and financial advisors on board before making any transfers or changes to your retirement plan. 

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