While the emotional implications of divorce can certainly be difficult to contend with, the logistical and financial consequences of divorce are often just as taxing. If you and your spouse have recently split up, you are probably looking for a new place to stay. Many people choose to rent an apartment or stay with family or friends while their divorce is pending, but others choose to actually purchase a home. If you would prefer to buy rather than rent, you may be wondering how the decision to purchase a new home will affect your divorce. Before making any major financial decisions during your divorce, It is crucial to understand how Illinois law affects the division of assets.  

Equitable Distribution of Marital Assets

Before we can discuss the consequences of buying a home while going through a divorce, it is important to understand how Illinois courts divide marital property. Illinois is an equitable distribution state. Courts divided marital property equitably, or fairly, based on several factors, including the spouses’ employment and financial circumstances, their future earning capacity, the standard of living established during the marriage, and more. Unlike in community property states, it is possible that one spouse may receive a greater share of the marital estate than the other during an Illinois divorce. 

Marital assets include any property or debts accumulated by either spouse during the course of the marriage. If you buy a home while you are still legally married and before a legal separation, the home will likely be considered marital property, and therefore, the value of the home will be subject to division during divorce. This is true even if the home is only titled in your name.

The complexity and cost of divorce can vary significantly depending on a divorcing couple’s financial circumstances. One issue that will greatly complicate a divorce is owning a family business. If you and your spouse own a business, either together or separately, and you are considering ending your marriage, you probably have concerns about how the business will be affected by your divorce, and vice versa. The valuation and division of a jointly owned business can be a major source of conflict during divorce. In these cases, it is highly recommended that you consult a divorce attorney experienced in managing divorces involving business owners.

Should We Sell the Business?

In an Illinois divorce, marital assets are divided between spouses according to equitable distribution. This means that each spouse receives a fair share of marital property according to factors like each spouse’s contribution to the marriage, their income and nonmarital property, and more. However, dividing a business is often not as simple as dividing the funds in a bank account.

Deciding to get a divorce is a much bigger decision than just choosing to split from your partner. Ending your marriage may potentially mean that you will see your kids less often, and you will need to give up ownership of some of the property you own. Determining how to handle ownership of the family home is often one of the most complex issues to be addressed during divorce. Some divorcing couples choose to sell their house and split the profits, but one person may not want to uproot their life. If both parties wish to continue living in the marital home, then disputes over the division of marital property may be difficult to resolve. If you are looking to retain ownership of your home, you should consider the following:

Determine the Value of the House

If you want to keep your house, you will need to buy out your partner’s share of the equity in the home, and the mortgage will need to be refinanced in your name. The equity is the value of the house minus the amount that is owed on the mortgage. It may be necessary to perform an appraisal or consult with a real estate professional to determine the true value of the home. 

Decide How to Divide the Home’s Equity

Once a proper value has been placed on the home, you will need to determine each spouse’s share of the equity. Illinois is an “equitable distribution” state, meaning that marital assets should be divided fairly between divorcing spouses. A home’s equity may be split evenly between spouses, or another fair and equitable arrangement may be reached. Spouses may be able to negotiate an arrangement between themselves, but if they cannot decide on this or other issues, the ultimate decision may be left up to the judge in their case.