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Illinois divorce lawyersOnce divorce proceedings start, parties will sometimes change their spending habits. For some, it is an act of revenge. For others, it is a strategy they employ to increase their overall settlement amount. In either case, excessive spending habits could lead to serious financial consequences in the divorce. Learn what you can do to combat excessive spending in a pending divorce, and how a seasoned divorce lawyer may be able to help with the process. 

Defining Excessive Spending

For some, the phrase “excessive spending” applies to all frivolous or luxury purchases (i.e., going to the salon, wine subscriptions, etc.). However, in a legal setting, it is only applied when a party’s purchases go above and beyond their normal spending habits. 

As an example, consider the divorcing spouse who recently spent $400 at the hairdresser. While such expenditure may seem excessive, it would only be regarded as such by the courts if such appointments were not “typical” for the party. For the spouse who has routinely gone to the hairstylist throughout their marriage, this is considered a regular, reoccurring expense. Because of this, it would likely be factored into their cost of living. 

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Wheaton divorce lawyersWhen it comes to protecting wealth, affluent families typically focus on matters pertaining to tax and estate laws. Unfortunately, there is another major (but often overlooked) threat to any large estate: the divorce.

Almost half of all U.S. marriages end this way, yet only a fraction of the affluent have an existing prenuptial agreement in place. In lieu of one, the estate is valued and then divided equitably among the divorcing parties. 

Unfortunately, the untangling of a marital estate can be a complex and difficult process. Foreign held assets pose even bigger challenges and greater consequences. Learn how to overcome them, and how a seasoned Illinois divorce lawyer can improve the outcome in your case. 

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Illinois divorce attorneysIn a divorce, marital assets are valued and equitably divided between the parties. Businesses, owned jointly or independently, may also be considered a part of the marital estate. The determination of its value is called the business valuation process. Learn more about this process, and how it could impact the outcome of your Illinois divorce. 

What is Business Valuation?

Business valuations are used to determine the overall health and net worth of a company. Each facet of the company is objectively and independently evaluated, including the company’s assets, expenses, revenue, cash flow, debt levels, and projected future earnings. 

Business Valuation Methods

The process for determining a company’s value will vary, depending on the industry, business type, and customer base. One of four methods may be used. 

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Wheaton divorce lawyersDebt is a serious issue for most Americans. According to a recent study from Northwestern Mutual, the average U.S. citizen has about $38,000 in personal debt - and that excludes their mortgage. If one were to double that for a married couple (almost $80,000 in debt), the importance of understanding how debt is divided in a divorce becomes clear. 

Equitable Distribution of Debt in Divorce

In most cases, marital debt is divided in a divorce in the same way as assets: equitably. Essentially, this means debts are allocated according to the income and expense of each party. Keep in mind that this rule usually only applies to joint, marital debts that were acquired during the union. Separate debts that parties acquired prior to the marriage, as well as sole-owned debts, may not be divided in the same manner. 

Legal Liability for Debt in Divorce

Regardless of who the debt is assigned to in the divorce, parties can still be held legally responsible for a debt if their name is on the account. Keep this in mind when a portion of marital debt is assigned to your spouse, and have a plan in place for handling a default on the account, should your spouse forget or fail to pay. Otherwise, you may rack up late fees or interest on your account, leaving you with unnecessary added expenses. 

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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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