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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 attorneysDivorce is a complex, all-encompassing process that can impact your mental, emotional, and financial well-being. Thankfully, the effects and potential consequences can be mitigated. For example, parties can seek therapy to deal with the feelings of grief and loss that often accompany divorce. When attempting to diminish the potential financial consequences of divorce, there are three major considerations that one should use in their case.

The How: Litigated or Mediated Divorce

While money should not be the driving factor in the divorce path that you choose, a mediated divorce is likely to cost less than a litigated one. Part of this can be attributed to court costs, but attorney’s fees may be higher in a contentious divorce, as the lawyer must often spend more time working the case. So, if the cost of your divorce is a concern, it may be beneficial to at least consider whether a mediated divorce may be in your best interest. Talk to your lawyer for help.

The What: Marital Assets to Be Divided

Any assets acquired during the marriage will likely be counted as marital assets in your case. (Speak to your lawyer about any possible exclusions.) Divorce laws require all of these assets to be divided equitably between the parties. Unfortunately, this term can be inflammatory in a divorce case, as two opposing parties are unlikely to agree on what is “fair.”

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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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DuPage County divorce attorneysMarried couples dream of retiring and enjoying their golden years together, but with the high rate of divorce these days, this dream is not always realized. In fact, divorce in retirement has become extremely common - so much so that it has even developed a name. Dubbed the gray divorce, retirement in your senior years can significantly impact your future. Learn how to prepare and mitigate the effects with help from the following sections. 

How Divorce Can Negatively Impact Your Retirement 

Divorce can be a costly endeavor, in and of itself, but its effect is often amplified when it occurs during or shortly before retirement. Much of this can be attributed to the division of assets and the lack of earning years left for the divorcing parties. Younger couples have time to rebuild their retirement; this may not be true for those approaching retirement or currently retired. Yet, like all other divorcing couples, their assets must be equitably distributed between the divorcing parties. 

Mitigating the Consequences of Divorce During Retirement 

Parties divorcing during or shortly before their retirement can mitigate the potential financial consequences with effective planning and preparation. The first step is to take an inventory of one’s income and expenses. Account for things like housing, utilities, food, and personal items. Then consider if any expenses can be cut, such as subscription services or luxury items. Next, determine if there may be any untapped resources. An example might be your spouse’s social security, which you may be eligible to collect, even after your divorce. 

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Wheaton divorce lawyersEven in the simplest, most straightforward of divorces, the division of assets can lead to contention. In those with complex assets, the stakes are inevitably raised. Ensure you get your fair share during your Illinois divorce by understanding how complex assets are divided. 

What Are Complex Assets? 

For most assets, the value is straightforward. As an example, consider the balance of your bank account. Its value does not change, based on circumstance or the market. Instead, it is a real asset; its value is the displayed amount. Complex assets work differently. Their value may be difficult to determine because the value is constantly changing, based on market trends or future value (stocks, bonds, retirement accounts, real estate, etc.). Other assets are based on obscure factors, such as buyer interest or individual appraisers (artwork, jewelry, collectibles, etc.). Needless to say, dividing assets like these can be difficult and complex. 

Determining Your “Fair Share” in an Illinois Divorce 

Illinois is considered an equitable distribution state, meaning each party gets a “fair share” of the marital assets. In mediation and other alternative dispute resolution situations, the parties negotiate and agree upon their shares. In court, a judge makes the decision. There is no “right” or “wrong.” Instead, there are parameters used to determine what a spouse may be owed in divorce. Some of these factors include the: 

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Illinois divorce lawyersOut of all the assets that a couple owns, the house tends to be the most valuable. It only makes sense for parties to struggle when deciding what to do with it while going through a divorce. Its ability to cause contention between the parties is also understandable, yet arguments can cloud judgment. Stop fighting and start considering the pros and cons of selling your home in a divorce, which are outlined in this post. 

Reasons to Sell Your Home in a Divorce (and the Potential Benefits)

A house is more than just a building. It is full of family memories. It is, perhaps, where you raised your children. It is your home, and possibly the only connection you have to a happier time. As such, discussions about selling it may be triggering for either you or your spouse, yet there are many situations in which this might be the most beneficial route. 

It may be the only asset of value in your marriage, which means it may be the only way to ensure you have the money to start over. The cost of maintaining it (mortgage, maintenance, HOA fees, etc.) may be too much of a burden for either you or your spouse to bear. Selling it could allow you to pay off the mortgage and still have a little bit of money left over. 

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Wheaton divorce lawyersThe division of assets can be one of the biggest sources of contention in an Illinois divorce. Part of the reasoning for this can be attributed to the term “equitable distribution,” which essentially means that each party is entitled to their “fair share” of the marital estate. What is your fair share, and how can you ensure you get it during your divorce? The following explains. 

Determining Your “Fair Share” in an Illinois Divorce 

Nothing in life is fair - especially not divorce. Yet, this is the terms that courts use when dividing assets in an Illinois divorce. What might your fair share look like? A few factors are used in reaching this determination, including: 

  • The overall value of your marital estate;
  • Your capacity to earn an income;
  • Your spouse’s capacity to earn an income;
  • Any involved children (and their needs);
  • Non-marital assets that may improve your living standard;
  • Which assets may be held by either party after the divorce; and
  • Any limitations that may hinder a party’s ability to earn a living. 

Essentially, the courts want to do what they can to ensure that you and your spouse are nearly equal in assets and income, once the divorce has ended. Achieving this lofty goal can be quite difficult, however, especially if there are hidden assets or deceptive practices involved. 

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Wheaton divorce attorneysMoney can be one of the most contentious aspects of an Illinois divorce case. Yet, when divorcing parties know how to effectively manage their own money during the process (instead of simply waiting on their settlement to get their financial life in order), the proceedings tend to be less stressful for everyone involved. Learn more about how you can start to improve your financial life, today, before you even begin your divorce, and discover how our seasoned attorneys can assist you with the process in the following sections. 

Create a Budget and Spending Plan

The first step to starting your new life is knowing what you own, what you make, and what you must spend. This information can all be obtained and understood with a budget and spending plan. These financial tools can also cue you into any potential problems that may be looming on the horizon. 

Know Where You Stand, Credit-Wise

Financial security requires you to look at more than just your income and expenditures; to create true hope for your future, it is important to also know where you stand with your credit. Not only is it the key to forging your new life, but it is also a tool that your ex can use to sabotage your future. Pull it before you file, monitor it during the process, and if you need help to get things back on track, contact a financial advisor for guidance and assistance. 

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Wheaton divorce lawyersBills and other financial obligations do not end just because you are filing for a divorce. In fact, money management is usually more difficult while trying to navigate the divorce process because there are more bills and less money to go around.

Thankfully, there are measures that one can take to improve their financial situation, even while pursuing a divorce. Learn more in the following sections, and discover how our seasoned divorce lawyers can assist. 

Track Your Finances and Develop a New Budget

The first step to improving your financial situation is to understand your finances. Start by tracking how and where you spend your money, then determine if any of your expenses can be eliminated or temporarily suspended. Doing this can give you more in the way of liquid assets. It also allows you to develop a new budget so that you can start saving for your new future. 

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DuPage County divorce lawyersDuring the Great Recession, many savvy investors jumped into the housing market - and a decent percentage of them hit it big. Their success, paired with popular house-flipping television shows, caused many “average” people, who had no real investment experience, to jump into the market as well. What happens to these investors when a divorce occurs? Learn more about how real estate is divided in an Illinois divorce, and discover what our seasoned Wheaton divorce lawyers can do to assist you with the process. 

Dividing Real Estate with a Prenuptial Agreement 

Ideally, investors would have a prenuptial agreement in place before a divorce, as this is the easiest way to ensure a straightforward division of the marital assets. Granted, there are situations in which a prenuptial agreement may not be honored (i.e. a prenuptial agreement signed under duress), but these are fairly rare. Just note that investors are highly encouraged to seek legal assistance when drafting their prenuptial agreements, as this decreases the risk of legal issues in the division of the marital estate. 

Dividing Real Estate Without a Prenuptial Agreement 

If the couple does not have a prenuptial agreement in place, the entire marital estate must be valued and equitably divided. Unfortunately, in high asset situations (which most divorces involving real estate are), the asset division process can be extremely complex. As such, it is highly critical that both parties have a seasoned attorney on their side, protecting their interests.

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Wheaton divorce lawyersMoney can cause numerous issues in a relationship. In fact, it is one of the biggest reasons that couples argue and divorce. It can also be an especially contentious matter in divorce. Thankfully, there are some steps that you can take to protect your financial future in an Illinois divorce case - and it starts with knowing which financial issues may impact your case. Learn more in the following sections, including how a seasoned divorce lawyer can assist with the process. 

Know the Value of Your Marital Estate

Every couple handles their money differently. Some couples share financial knowledge and information. Others have just one party managing marital finances. In either scenario, complications can arise. The biggest risk is hidden money or debts, which is far more common than most people think. In fact, one in five parties admits that they have undisclosed money or debts in their relationship. As such, it is critical that parties obtain the assistance of a seasoned lawyer to ensure they have a clear understanding of their marital finances. 

Examine Your Marital Debts

Divorcing couples are usually aware of just how important it is to take stock of their marital assets, but they often overlook the importance of taking stock of their marital debt. Unfortunately, such an oversight can dramatically impact the outcome of one’s divorce case. In contrast, parties that take stock of their marital debt and create a plan for dealing with it often experience better financial outcomes after their divorce. An attorney does not have to be your only resource for resolving marital debt either; you can also find assistance through an accountant, financial advisor, or credit counselor. 

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DuPage County divorce attorneysDivorce can be a costly endeavor - especially when you are not prepared for the process. Thankfully, it is possible to place yourself ahead of the proceedings. Learn how with the following pre-divorce money management tips, and discover how our seasoned Wheaton divorce lawyers can help you with the process, long before you ever even file. 

1. Track Income, Assets, and Expenses

Before filing for divorce, it is crucial that you have a clear understanding of your financial situation. All debts, income, real estate, retirement accounts, pension plans, and other assets (i.e. jewelry, collections, etc.) that were acquired during the marriage should be considered. Once you have all the information you need, such as account statements and appraisals, make copies and store them in a safe place where your spouse cannot find them, such as in a safety deposit box or at a relative’s house. Also, be sure to regularly update documentation on any assets that may fluctuate in value, such as your bank account or retirement account. 

2. Check and Monitor Your Credit

Spouses who suspect a divorce may be on the horizon can become retaliatory, sometimes in the worst way possible. They may attempt to take out credit in your name, or they may run up your credit card bills. Avoid such issues by monitoring your credit before and after you file. Remove your spouse as an authorized user on any personal accounts, freeze or dissolve joint accounts (only do the latter under the guidance of your attorney), and report any suspicious activity. 

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DuPage County divorce lawyersWhile some divorcing couples are able to reach an amicable agreement on the division of their assets and debts, others struggle with reaching a compromise on even the smallest of details. These cases, which are often referred to as “contentious divorces,” can cost couples a great deal of both time and money. Learn how you can protect your assets in such a divorce, and discover what our seasoned Illinois divorce attorneys can do to improve the outcome in your case. 

Is Your Divorce at Risk for Contentious Proceedings? 

Perhaps the best way to protect one’s self in a contentious divorce is to determine, as soon as possible, if negotiations may turn hostile. First, consider your wealth class.

Marriages with an exceptionally high net worth (typically over $5 million dollars) tend to end with little fighting, as parties recognize that peaceful negotiations are one of the most effective ways to protect their wealth. Of course, parties may still become greedy during the proceedings, or they may feel the need to be vindictive toward their former spouse. As a result, individuals may attempt to either hide or spend (dissipate) assets in order to keep them away from their spouse.

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Illinois divorce attorneysMoney is one of the leading stressors in a marriage, which also makes it one of the leading causes of divorce in the United States. It is not necessarily a lack of money that leads to a divorce, however. In fact, statistics show that divorce rates actually rise during periods of economic growth instead of declining, which suggests that a couple’s relationship with money (and how it ultimately affects their relationship with each other), is more of an influential factor in their risk of divorce than the balance of their bank account. 

How Wealth Can Increase One’s Risk of a Divorce

Wealth is often seen as the answer to all money problems, but the upper-middle-class and barely wealthy can prove this simply is not the case. They can experience the same issues that lead to financial strain for lower-income families - the ever-increasing cost of living, child tuition costs, student loan debts, expected lifestyle, social pressures, etc. - and they can just as easily over-expend. If the financial strain becomes bad enough, the marriage may start to crumble. Fears over losing one’s status, feelings of guilt or remorse for the poor choices that one made during the couple’s downfall, and casting blame at the other party can further exacerbate matters. If left to fester, or if financial strain worsens, a divorce may ultimately ensue. 

Protecting Your Assets in a Failing Marriage 

When a marriage begins to fail, it is important that you take critical steps to protect any remaining assets from creditors, and even one’s own spouse. Asset hiding and dissipation are extremely common in divorces among the wealthy, and even more likely to occur in divorces that involve: 

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Illinois divorce attorneysDivorce can be a costly endeavor - especially for the wealthy. In fact, the moderately wealthy tend to argue more than any other demographic group during divorce. Yet, interestingly enough, the extremely wealthy tend to divorce more amicably. Why is this and how can you protect your wealth, regardless of your marriage’s net worth? The following information explains. 

Moderate Wealth vs. Extreme Wealth - What is the Difference?

Although contention over money is common across all income groups, those that are worth one million to five million tend to fight longer and far more frequently than any other group of divorcees. Interestingly enough, couples worth over five million tend to divorce more amicably. Relationship experts believe there is a reason for this. They say that, when you are only moderately wealthy, you are not set for life, and that lack of financial security can cause some to become hostile in divorce. Unfortunately, the desire to protect one’s wealth (and the social status that comes with it) can sometimes be the very thing that threatens their financial future. 

Long, contentious divorces usually cost more money - and not just because attorney fees are higher. There may be costs associated with forensic accountants, which are often to track. down hidden assets in high net worth divorces. Parties may also need a valuation of a business, and each party may choose to hire their own evaluator in addition to the one appointed by the courts. High net worth couples with children may also squabble over the amount of child support and other child-related matters, which can further drive up the cost of a high asset divorce. Thankfully, there are ways to avoid such pitfalls in your own divorce case. 

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Illinois divorce attorneysCryptocurrencies were introduced in 2009, which means they are just now starting to show up in divorce courts. Sadly, the law is finding that there are numerous complications when attempting to divide cryptocurrencies in an Illinois divorce. Painstakingly difficult to trace and highly volatile when it comes to value, cryptocurrencies are making for some highly contentious cases. Learn more about them in the following sections, and discover how a seasoned divorce attorney can help improve the overall outcome in your case. 

Cryptocurrency as a Hidden Asset in Divorce

A lot of people invest in cryptocurrencies because they enjoy the anonymity that they offer. Unfortunately, the very appeal of cryptocurrencies is what also makes them problematic in divorce. Often associated with money laundering, tax evasion, and other illegal acts, cryptocurrencies can be hidden by spouses who wish to keep more than their fair share in a divorce. It is possible to trace them down, even if they have been pulled offline and put onto a USB, but the process can be lengthy and costly. The time and cost associated with this process can further complicate the divorce process, and it only adds to the other issues associated with dividing cryptocurrencies in an Illinois divorce. However, to ensure one’s financial stability in the future, it is important for spouses to formally and specifically request documentation on cryptocurrencies during the discovery process of their divorce. 

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Illinois divorce lawyersThe valuation and distribution of assets is one of the leading sources of contention during a divorce - even more so when the assets are unusual or otherwise difficult to value. For example, artists and other creative individuals may be required to value and split the value of their works. Art collectors may be subject to the same valuation and division of their beloved artwork. Other collectibles and family-run businesses can also be difficult to divide. Learn what you need to know about dividing difficult to value assets in your Illinois divorce, and discover how a seasoned divorce lawyer can assist you with the process. 

Placing Value on Unusual Items During Divorce 

Divorce settlements are reached by first examining the total value of the couple’s marital estate. Some assets are easy to value. For example, a bank account is only worth what is in it. Other assets, such as artwork, jewelry, cryptocurrencies, coin collections, luxury furniture, and businesses are far more difficult to value. For items such as these, an expert appraiser is needed. Most often, they will determine what the item would be worth if it were auctioned off or sold. 

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Illinois divorce lawyersStudent loan debt is currently at an all-time high in the United States ($1.5 trillion), and it is creating excessive financial stress for married couples all over the country. In fact, a survey of divorced couples revealed that student loans were a factor in one-third of all failed marriages, and a total of 13 percent specifically blamed student loans for the end of their relationship. How are these debts divided when a couple pursues a divorce, and how can a seasoned divorce attorney help protect your financial well-being during the process? The following information explains. 

How Student Loan Debt is Divided in an Illinois Divorce

Debts, like assets, are divided equitably in an Illinois divorce. What this essentially means is that the assets, income, and future earning potential of each party is considered when determining how the debt should be split. The one exception that may apply is if the debt was incurred prior to the start of the marriage; in this instance, it is typically considered pre-marital debt, and the owner of the loan is usually responsible for repaying it on their own. 

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