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DuPage County family law attorney for marital asset distributionWhile we often think of marriage as a personal or romantic union, it is also a financial partnership. When two people get married, they combine their financial resources, either intentionally or unintentionally. Therefore, the end of the marriage comes with considerable financial implications. If you are planning to get divorced, you may have questions about how your property will be divided. You may specifically wonder if the spouse who earned the majority of the income during the marriage is entitled to more of the marital estate during divorce.

What Property Is Divided in an Illinois Divorce?

When you file for divorce in Illinois, there are several issues that you will need to resolve. One of these issues is the distribution of marital property. The marital estate consists of property that either spouse accumulated during the course of the marriage. It includes real estate, personal property, collectibles, investments, retirement accounts, and other assets that were obtained while the couple was married. Separate property includes property gained by inheritance or property that a spouse acquired before the marriage took place or after a legal separation. However, understanding what is included in the marital estate and what is separate property is not always easy. Issues like commingled or combined assets can complicate property division during divorce.

Reaching a Property Division Settlement

There is a misconception that the courts always divide property in a divorce. In reality, the vast majority of divorce cases are resolved through a settlement or mutual agreement. You and your spouse may decide how to divide your assets on your own, with help from your attorneys, during divorce mediation, or through another avenue. If you cannot reach an agreement, then the court will step in and divide marital property for you. Illinois courts follow a legal doctrine called equitable distribution in contested divorce cases. Property is divided equitably but not always evenly, and this division is based on factors such as:

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Wheaton debt division attorneyDid you know that the average amount of personal debt for Americans aged 40-55 is over $135,000? Whether through a home mortgage, personal loans, credit cards, or student loans, most people have at least some debts. If you are planning to get a divorce, you may be wondering how debt will be handled. Typically, marital debt is handled similarly to marital property during an Illinois divorce, but each case is different.  

Illinois Laws Regarding Marital Debt

In many marriages, one spouse is more of a spendthrift than the other. Often, differences in spending habits and financial goals are one of the issues that lead to divorce. If your spouse has accumulated a considerable amount of debt, you may wonder if you will be expected to repay it after divorce. You may also wonder if your spouse will be on the hook for debts that you have acquired.

Illinois courts divide marital property according to a legal doctrine called equitable distribution. Property and debts are divided fairly but not always evenly. Marital property and debts, meaning property and debts obtained during the marriage, are divided between spouses. Non-marital property, which includes assets and debts acquired by a spouse before getting married, is assigned to the spouse who originally acquired it. However, in the majority of cases, the court does not decide the allocation of marital property and debts during divorce. The divorcing couple instead reaches an out-of-court settlement regarding property and debts through negotiation, mediation, or another dispute resolution method.

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DuPage County property division lawyer for hidden assetsWhen two people join their lives in marriage, “yours” and “mine” become “ours.” According to Illinois law, spouses have the right to an equitable division of marital assets during divorce. Any property that was accumulated during the marriage by either spouse is part of the marital estate and subject to division. This property may include household items, jewelry, vehicles, and other physical property, as well as retirement accounts, investments, business interests, and other complex assets. Spouses who do not want to share the marital estate fairly may try to manipulate the asset division process during divorce by hiding assets or property. Some of the most common methods of concealing assets include:

Underreporting Income and Business Revenue

Divorcing spouses in Illinois are required to fill out a financial affidavit that lists their gross income, expenses, debts, assets, health insurance information, and other financial data. One of the easiest ways to hide assets during a divorce is for a spouse to simply lie about his or her finances. Spouses may fail to disclose bank accounts and funds or undervalue the worth of their business, investments, or other assets. Business owners may use cash transactions, omit financial transactions from business records, delay the receipt of client payments, create fake expenses and debts, pre-pay vendors, or take other actions to make a business appear less successful than it really is.

Temporarily Transferring Assets to Another Party

Some spouses may attempt to reduce their net worth prior to divorce by transferring assets to other people or organizations. For example, they may lend cash to friends or family members with the understanding that the person will return the money after the divorce is finalized. They may also use the IRS as a means of temporarily reducing their assets. A spouse may intentionally overpay his or her taxes knowing that the IRS will refund the overpayment through his or her tax return. Expensive items like art, antiques, or jewelry may also be used to artificially lower a spouse’s net worth. A spouse may buy an expensive, hard-to-value item and then report the item’s value as much lower than it actually is on their financial affidavit. After the divorce, he or she will intend to sell the item and recover the money.

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Wheaton, IL divorce attorney for division of professional practicesOne of the most significant parts of the divorce process is the division of marital assets and debts. Some divorcing couples are able to reach an agreement about property distribution through attorney-assisted negotiations. Others reach property distribution settlements through an alternative dispute resolution method like mediation or collaborative law. When a property distribution agreement cannot be reached, the case may go to trial. Complex assets such as investments, small businesses, and professional practices are often especially difficult to quantify and divide during divorce. If you are a doctor, accountant, or other professional, and you own your own practice, you should understand how the decisions about this practice may impact your divorce.

Determining the Identity of a Professional Practice

If there is not a valid prenuptial or postnuptial agreement that addresses ownership of a professional practice, the practice may be subject to division during divorce. Illinois courts divide marital property using a legal theory called “equitable distribution.” Only marital assets, or assets that were accumulated during the marriage, are subject to division. If you opened your professional practice during your marriage, the practice is almost certainly considered marital property.

Non-marital property, meaning property that was acquired before the marriage, is typically not subject to division. According to these general rules, a professional practice that an individual opened before tying the knot would be classified as non-marital property and therefore not subject to division during divorce. However, your practice may still be classified as marital property even if you owned the practice before you got married. For example, if your spouse made significant contributions to the practice, or if marital funds were used to finance the practice, it is possible that the practice will be considered part of the marital estate, regardless of when it was established.

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DuPage County divorce lawyer for division of pension benefitsIf you are like most working adults, you probably plan to enjoy your retirement to the fullest. This can make retirement funds a serious concern during divorce. Retirement accounts are typically treated the same as other types of marital assets. The portion of the retirement funds that were accumulated during the marriage are a marital asset subject to division, while the portion of the retirement funds that were accumulated before the marriage are not subject to division. However, accurately valuing retirement funds is not always as straightforward as it may seem. Pension plans are often especially difficult to accurately quantify and divide during divorce because the value of the pension relies on the future payout of the plan.  

Methods of Valuing Pensions

Three of the most common valuations methods used to determine the present value of a pension for the purpose of asset division during divorce include:

  • Life Expectancy Method: This approach is based on the pension holder’s life expectancy and the expected pension benefits he or she will receive.

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