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Wheaton divorce lawyerIn an Illinois divorce, all property and assets belonging to the marital estate must be distributed fairly between the two spouses. However, certain assets known as non-marital property are not included in the division. If you are preparing for a divorce, it is important to review your finances to identify any non-marital property that you can protect. However, the process of protecting your non-marital assets can begin even before your marriage.

Strategies for Protecting Non-Marital Property

Under Illinois law, non-marital property includes property that was owned by either spouse before the marriage, as well as property acquired by either spouse during the marriage through a gift or inheritance. However, even property of this nature can become a factor in the division of assets if you are not careful to keep it separate from the marital estate. Here are some strategies for protecting your non-marital assets both before and during your marriage:

  1. Create a prenuptial or postnuptial agreement. If you have substantial assets before getting married, you can ask your future spouse to work with you to create a prenup that specifies the assets that will remain non-marital property. You can also create a postnuptial agreement during the marriage that accomplishes the same purpose.

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DuPage County divorce attorneysWhen a couple gets divorced in Illinois, all of their financial assets will need to be considered in order to determine a fair distribution of marital property. Many people are aware that this includes properties like the marital home, vehicles, and joint bank accounts, but it also includes some assets that you may not expect, like businesses and individual retirement accounts. One of the most complicated kinds of assets that may need to be divided in a divorce is a settlement or verdict from a civil lawsuit.

Dividing Personal Injury Settlements and Other Lawsuit Awards

Illinois law differentiates between non-marital property that belongs to one spouse alone and marital property to which both spouses have a right and which must be divided in a divorce. Assets acquired before the marriage or after a judgment of legal separation are typically considered to be non-marital property, while most assets acquired during the marriage are considered to be marital property. These criteria can apply to lawsuit awards in the same way that they do for many other types of assets.

One common example of a lawsuit award that can complicate the divorce process is a personal injury settlement or verdict. These cases often involve injuries to just one spouse, so the logical assumption may be that compensation for damages would belong solely to the person who was injured. However, a 1980 Illinois Supreme Court judgment clarified that an injury settlement or award granted during the marriage can be considered marital property because it compensates for medical expenses and lost wages that affect the whole family. That said, because Illinois requires an equitable distribution of marital assets rather than an equal split, a court may determine that the injured spouse should be granted a larger share of the award during the divorce.

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Wheaton divorce attorneysThe recent passing of the American Rescue Plan Act, including another round of COVID-19 economic impact stimulus payments, has been welcome news for many families who have struggled financially throughout the pandemic. However, if you have been through a divorce in the past year, especially if you have filed taxes jointly with your former spouse, obtaining your share of the stimulus may be more difficult than expected. Understanding your eligibility for the stimulus, as well as how it is distributed, can help you ensure that you receive the funds to which you are entitled.

Who is Eligible for the 2021 Stimulus Payments?

The most recent round of stimulus payments provides up to $1,400 for each U.S. citizen or lawful resident who qualifies based on their adjusted gross income. Individuals qualify for the full amount if their annual income is $75,000 or below, or $112,500 or below if they file as head of household. Married couples who file taxes jointly qualify for $2,800 ($1,400 per spouse) if their adjusted gross income is $150,000 or below. Eligible individuals and couples will also receive $1,400 for each qualified dependent. Individuals and married couples with annual incomes above these thresholds may qualify for reduced stimulus payments, though payments phase out completely at an individual income of $80,000, a head of household income of $120,000, and a married couple income of $160,000.

How Are Stimulus Payments Disbursed to Divorced Couples?

Most stimulus payments for this round are distributed using information provided when filing either a 2019 or 2020 tax return. If you are recently divorced and you filed your taxes individually for both of these years, your stimulus payment should be sent to you, likely as either a direct deposit to your bank account or a check sent in the mail. However, if you filed taxes jointly with your former spouse in 2019 and/or 2020, it is possible that the full amount of the stimulus will be delivered to the spouse who still has access to the bank account that is set up for direct deposit, or who still lives at the address on file with the IRS.

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DuPage County divorce attorneysUnlike some other states, Illinois does not require divorcing couples to divide marital property in half between them. However, it does require them to divide assets equitably to prevent either party from facing excessive hardship, and in order to do so, it is important to know how much the marital property is worth. Valuing property can be one of the most complicated parts of the divorce process, but with the help of an experienced attorney and financial professionals, you can better ensure an outcome that protects your interests.

The Process of Valuing Marital Property

Before beginning the process of valuing marital assets, it is important to determine which properties are considered to belong to the marital estate, and which are considered individual, non-marital property. In general, non-marital property is that which was acquired by either spouse before the marriage, whereas marital property is that which was acquired by either spouse during the marriage, except through an inheritance, gift, or a few other exceptions. In some cases, however, non-marital property may have been combined or commingled with marital property in a way that makes it difficult to isolate during a divorce. It is usually a good idea to work with a personal accountant or another financial professional to help you distinguish marital and non-marital property.

Once you have a better idea of which properties are considered marital, it is then important to determine how much each of them is worth. Some assets, like bank accounts, retirement accounts, and stock investments, have a relatively straightforward value, but it is important to establish a date at which the value is determined for division purposes, since it may fluctuate over time. You may be able to agree upon a date with your spouse, or the court may make the decision.

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Wheaton family law attorneysIn an Illinois divorce, couples must divide all marital property equitably according to their personal situation. In order for a fair distribution to occur, it is important to ensure that neither spouse intentionally harms or selfishly uses property belonging to the marital estate in the time leading up to the divorce. If you believe that your spouse has been dissipating marital assets, it is important to work with an attorney to gather evidence and present your case to the court to make the situation right.

What is Considered Dissipation of Assets?

In order for a spouse’s spending or use of property to be considered dissipation of marital assets, Illinois law states that it must take place after the marriage has started to break down irretrievably. The behavior must also involve marital property, generally meaning assets acquired during the marriage that are considered to belong to both spouses. A spouse using his or her own non-marital assets during this time will likely not affect the divorce resolution.

The assets in question must also have been spent in a way that harms the marital estate or benefits only the spouse who does the spending. Possible examples include making an extravagant purchase or going on a solo trip, gambling excessively, destroying marital property, or spending money on an affair outside of the marriage.

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