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Illinois divorce attorneysThough divorce may be the right choice for a marriage, it is far from the easy one. It can be mentally and emotionally draining. As a complex and nuanced legal process, it can also be financially draining if not approached in the right manner. Reduce the risk of significant financial issues during your Illinois divorce by taking these five steps during the preparation phase.

1. Track Your Income and Expenses

Start tracking your income and expenses, as soon as you realize that divorce is inevitable. The more financial information you have, the better. Check bank accounts, stocks and bonds, savings accounts, any investment interests, retirement accounts, and any educational savings accounts that you and your spouse may have set aside for your children. Also, ensure you know exactly how much income you and your spouse bring in each month. 

You’ll also want to take stock of any assets that you and your spouse may own. This can include: 

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Wheaton divorce attorneysOf all the issues that a couple faces in divorce, matters that pertain to the division of marital assets can be some of the most complex, confusing, and contentious. This area is also where couples tend to make the most critical mistakes. Avoid such issues during your Illinois divorce with help from the following information and assistance from a competent divorce lawyer. 

How Assets Are Handled in an Illinois Divorce

Unless the divorcing parties signed a prenuptial agreement before the beginning of their marriage, the assets that were obtained over the duration of their union are typically considered “joint” or “marital assets.” Such assets are usually subject to the division of assets process that takes place during a divorce. Parties can negotiate how they will be divided, but it is highly recommended that spouses each obtain their own legal counsel before signing a settlement agreement, as there may be factors that dramatically change one’s entitlement to the marital estate. For example, a stay-at-home mother may not think she is entitled to much of the marital estate since she did not really earn any income over the course of the marriage, but the courts would consider her contribution to the family (sacrificing her career or earning ability to care for the couple’s children) as one that increases her overall stake in the marital estate.

When to Split the Debts and Assets in Your Marital Estate

When it comes to dividing your debts and assets in a divorce, timing is everything. Some items should not be divided until the entire divorce process is complete (i.e. a retirement pension plan or a child’s college savings fund). Others, like credit card debt and student loan debt, can be separated before you officially file for a divorce, so long as you both agree to the terms. How you handle the latter is entirely up to you, but do not enter an agreement or make changes to your marital estate without first consulting your attorney. They can guide you in how to ensure that any agreements made before the start of proceedings are honored at the end of them. 

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Divorce and Lottery Winnings In Illinois, DuPage County divorce attorneysThe website Central Illinois Proud recently reported on several stories of people winning the lottery before their divorces were finalized. The main question that comes up is whether the soon to be ex-spouse is entitled to any of the winnings. While it seems like this would be a rather basic question, like many parts of the law it is not as straightforward as it seems.

Disclosure

If you have won a significant amount of money and are separated or in the process of divorce, you need to make sure you are upfront with your attorney and your spouse about the winnings. The Central Illinois Proud article highlights the case of a California woman who won the lottery, and then filed for divorce a few days later. She did not plan to tell her ex-spouse about the money but then her winnings, and her deception were found out during the divorce process. The court ended up awarding her ex-husband all of the winnings.

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Dividing Retirement Benefits During a DivorceFor many divorcing couples, retirement plans are one of the largest assets they have. Pensions and defined contribution retirement plans are generally subject to division during the divorce. That means that if a couple is married when benefits accrue, then the benefits should be considered in the division of property even if it will be awhile before the benefits are actually paid. This is one of the most complex subjects in asset division. For specific answers for your situation, contact a knowledgeable property division attorney.

General Rule

The Illinois Marriage and Dissolution of Marriage Act governs property division during divorce. Courts require that assets be split equitably, which does not necessarily mean equally. Generally, the benefits earned during the marriage are split between the couple. However, with some plans, especially pension plans, this can be a more difficult calculation than it may seem.

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divorcing retirees

A divorcing couple’s finances are often one of the largest issues to be addressed by their lawyers and a judge in court. It is usually assumed that the spouse who benefits from a financial award has prevailed. However, a financial article recently suggested that other factors may be more important than money in a divorce, especially for retirees and those about to retire.

Lasting Effects

The repercussions of a decision in a divorce case last far beyond the end of the case, and can even be felt years down the road. Retirement plans made by a couple when they were married can be completely upheaved when they divorce, leaving two single people to make new plans for retirement. Items of property that were assigned to one side over another may be difficult to sell, or may be only of sentimental value. Other non-financial factors, such as family visitation, are also important, despite the lack of financial value.

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property division illinois divorceDuring a divorce proceeding, the parties may attempt to come to an agreement about the way in which they will divide their marital property between them. However, if they are unable to come to an agreement, or if their agreement is found to be unfair and unconscionable, it is up to the Illinois Courts to divide the marital estate between the divorcing parties in a way it sees fit. The court employs the law as a guideline in making a property determination within a divorce decree.

Equitable Distribution

Illinois state law follows the concept of equitable distribution in dividing marital property. This allows the court to make a property determination based on fairness and may not involve a perfect 50/50 split of marital property awarded to each party. The court will separate what is classified as marital property from what is considered separate property, and will equitably divide the marital property between divorcing spouses.

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division of property IMAGEIf you are going through a divorce, there is more to consider than the physical separation from your spouse. Especially if you have been married a long time, the division of property can be the most complicated and difficult step of the proceeding. According to the Illinois General Assembly and the state’s Marriage and Dissolution of Marriage Act, Illinois is an equitable distribution state. This means that all property acquired during the marriage will be considered for equitable distribution, regardless of whose name is on the deed. The only possessions that will not be considered for 50/50 distribution upon divorce are those that are categorized as separate property. According to the Huffington Post, separate property generally includes (but is not limited to):

  • Property owned by either spouse before the marriage;
  • Inheritance received (either before or after the marriage);
  • A gift received by the husband or wife from a third party;
  • Payment from a personal injury claim.

But it is important to remember, according to the Huffington Post that, “separation property can lose its separate property status if you commingle it with marital property or vice versa.” It can become even more complicated when divorcing couples take into consideration the tax implications of assets, however—something many couples take for granted, according to the Chicago Tribune. One financial planner who assists divorcing couples told the Tribune that, “the biggest assets most families have are the house and retirement plan. But the house can be sold without paying tax, while the retirement plan cannot.” This is just one reason why it is crucial to seek the counsel of a legal professional when going through a divorce. If you or someone you know is looking for a divorce attorney in the Chicago area, contact the Davi Law Group today.

marriageMarriage is a risky proposition, considering that about half end in divorce.  Just as you protect yourself from risks by having insurance, you can do the same for your marriage.  A prenuptial agreement can act like an insurance policy for your union and any assets you would want to keep in the event of a divorce.  Nancy Dunnan, a financial advisor in New York City, states that “marriage is not just an emotional and physical union—it’s also a financial union.  A prenup and the discussions that go with it can help ensure the financial well-being of the marriage.”  These agreements have become more popular in the past couple of years. A survey conducted by the American Academy of Matrimonial Lawyers shows that 63 percent of divorce lawyers have noticed an increase in the number of couples creating prenups over the last three years.  Forty-six percent of the lawyers surveyed also noted that more women are initiating the prenup discussion.  AAML President Alton L. Abramowitz had this to offer as a possible explanation.  “I think people have become much more conscious of the availability of prenuptial agreements and there’s a greater emphasis on protecting either premarital assets that may increase in value, or assets that may increase in value during the marriage primarily because of the efforts of one spouse because of their career.” Asset protection is not the only issue that can be covered in a prenuptial agreement.  These contracts can also outline how debts and assets are divided in a divorce which is important because of the volatility of the real estate market and economy as a whole.  They can also include how an inheritance or other assets that was acquired before a marriage are divided during a divorce.  Spousal support is another typical topic that can be included in a prenuptial agreement.  If you have additional questions or would like to create a prenup for your marriage, contact an experienced family law attorney in DuPage County today.

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