People who sustain serious injuries at work often depend on the monetary compensation they receive from workers’ compensation or a personal injury settlement. The money victims receive is necessary for medical costs, which can be exorbitant, and to make up for the wages lost due to the injury. You may believe that, in the event of a divorce, your settlement money will remain yours alone, since you are the one who is affected by the injury. However, Illinois law defines marital property as all assets acquired during a marriage – and money acquired because of workers’ compensation and personal injury settlements may be classified as a marital asset. 

What is Non-Marital Property? 

Illinois law clearly enumerates the kinds of assets that are considered non-marital property, and anything that falls outside of non-marital property is generally considered marital property. Non-marital properties must have been:

• Obtained before a marriage

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When any couple gets divorced in Illinois, one of the many issues they will have to address is how property will be divided between the two of them. The property division process can be taxing for many couples, especially if they cannot agree on how the property should be distributed. In some cases, issues can arise when one spouse does not agree with the marital and nonmarital property designations assigned to certain assets. Many couples have expensive and valuable assets, such as the family home, vehicles, and perhaps even a business or professional practice. Determining a correct designation for those assets is crucial to getting a fair distribution of marital property. However, determining what is and is not marital property is not always as clear-cut as you would think.

Determining Commingled Property

In Illinois, only marital property is included in the division process. This means that any property or debts you and/or your spouse acquired during your marriage is fair game, with a few exceptions. Property is considered nonmarital property acquired during the marriage if it was:

• A gift given to you only

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If you are a business owner, there are various issues that you must address if you get a divorce. Asset division can be a messy process, but when you own a business, there are many more financial aspects that you must consider before you divide your assets and liabilities. When it comes to dividing your property, the state of Illinois uses an equitable distribution process to ensure both spouses get their fair share of the marital assets. This means that your spouse could potentially be entitled to a portion of your business if the business is deemed to be marital property. If not, your spouse could still be entitled to a portion of the profits the business has made during the time you were married, which is why it is important to get a fair valuation of your business before beginning the process.

Business Valuation Methods

When valuing a business during a divorce, there are usually three main options that you have. You can choose to value your business based off of its assets, its market value, or the income it generates. There are benefits and downsides to each method, which is why you should consult with an attorney before deciding.

• Asset approach: Valuing a business using the asset approach method requires you to add up all of the business’ assets, including both tangible and intangible assets. Then, you subtract your liabilities from those assets and you are left with the value of your business. This method can have downsides, such as conflicting ideas about how much each asset is worth.

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Most marriages involve division of labor. One spouse may be in charge of grocery shopping and cooking while the other spouse handles homework, soccer practice, or other child-related matters. One spouse may handle lawn maintenance and home repair as the other focuses on laundry and indoor chores. While dividing responsibilities is common in a marriage, there is one way in which this division of labor can put a spouse in a very vulnerable position during a divorce. If you have not been involved in household financial decisions, it is important to start learning about your finances as soon as possible.

Being Ignorant of Your Financial Situation Can Lead to an Unfair Divorce Settlement

In an interview recently published in the Wall Street Journal Magazine, Kris Jenner admitted that she was embarrassingly uninformed about her own finances during her marriage to Robert Kardashian, Sr. She explains that she did not know how much she and her husband spent on household expenses and never once paid a bill. Jenner’s story is not uncommon. Many spouses leave the financial management to the other spouse. Unfortunately, ignorance is not bliss when it comes to finances and divorce, and if you do not fully understand your financial situation, this can put you at a disadvantage when negotiating a divorce settlement.

Start Gathering Financial Documents Now

If you are planning to get a divorce, it is important to know where you and your spouse stand financially. Property that is acquired by either spouse during a marriage is typically considered marital property. Both spouses have a right to an equitable share of marital property. Debts acquired by either spouse during the marriage are also jointly held by the spouses. 

Divorce can make some people act in irrational or even malicious ways. One example of this is when a spouse purposely destroys the other spouse’s property. A resentful spouse may set fire to the other’s belongings, throw out important documents, or sell valuables for cash. If your spouse has destroyed your property or wasted assets during or immediately prior to your divorce, it is important to take steps to protect yourself and your property. It is also important to educate yourself about your legal options moving forward. You may be able to recoup the value of the destroyed property through a dissipation claim.

Get a Financial Restraining Order to Protect Your Assets During Divorce

If your spouse is intent on seeking vengeance through selling your property, destroying your assets, or emptying joint bank accounts, you need to take immediate action to protect your finances. One option is to request a temporary financial restraining order. This is a court order that prevents both you and your spouse from making unusual financial transactions or significant purchases. A financial restraining order freezes joint accounts and protects marital assets. The order also prevents the spouses from spending, transferring, selling, or hiding funds or property.

A Dissipation Claim May Allow You to Recover the Value of Wasted Assets

If your spouse has already misused, wasted, or destroyed assets, you may still be able to reclaim the value of these assets. Per Illinois law, “dissipation of assets” occurs when a spouse wastes assets during the end of the marriage. More specifically, dissipation involves using assets in a way that only benefits one spouse while the marriage is experiencing an “irretrievable breakdown.” Case law has established that dissipation may involve wasting marital or non-marital assets. A marriage is considered to be in an irretrievable breakdown when the end of the marriage is inevitable, and the spouses have stopped trying to salvage the marriage. Through a successful dissipation claim, you may be awarded a proportionally greater share of the marital estate to compensate you for the wasted or destroyed assets.