Divorce is mentally, emotionally, and physically draining. There are huge financial implications involved in a divorce as well. As a result, assets such as the house, rental property, pension plans, a jointly owned business, and much more are created. When a divorce happens, these need to be equally split up.
In the state of Illinois, we follow the Equitable Distribution Law which states that, the wealth settlement between the contesting individuals needs to be fair and justified. It should be done keeping in mind the financial standing of each spouse.
Property and wealth division is a complex legal matter, and you will need expert assistance and counsel. However, there are a few basic guidelines, while dealing with asset and wealth division in a divorce. Keeping these in mind makes this difficult process a tad bit easier.
Try Reaching an Agreement
The unpleasantness that comes with a divorce is unavoidable. But you can mitigate it to a certain extent by reaching an agreement about your finances. An attorney can help you achieve consensus between the husband and wife. This agreement then gets converted into an order recognized by the court. However, do not make a settlement in ignorance.
Consult your attorney and negotiate terms and conditions in a way that you are not selling yourself short. Make informed and wise decisions. When both spouses are able to reach an agreement by themselves, you will save legal costs, and emotional turmoil.
Your attorney will tell you how to go about this agreement, so that it is accepted in the court of law. Once this is confirmed, it becomes an order by consent where the financial equations and expectations between the two parties are clearly listed out.
Understand the Difference Between Separate and Marital Property
Separate property include all that the husband or the wife owned individually before marriage. This includes property, inheritance received by either, gifts of value like cars, jewelry, and monetary compensation received in a personal injury lawsuit.
These are not entitled to be divided between the two unless it has been adjoined with marital property. Simply put, if you have turned individual possessions of yours into joint possessions, then they become marital property. The house was your property before marriage, but if you had put down your husband, as a co-owner during the tenure of your marriage, it becomes marital property and subject to asset distribution.
Marital property is everything that the couple has acquired during the tenure of the marriage. It does not matter which of the spouses own the property. All of these assets, bank accounts, home, brokerage accounts, professional licenses etc. need to be justifiably divided between the couple. So, the house you both acquired during the marriage may be in his name, but understand that you have equal rights over it.
What Qualifies as Spousal Maintenance?
Understanding the basics of spousal maintenance and why it forms such an integral part of most divorces is important.
There are various tax deductions and implications associated with spousal maintenance. Consult an expert lawyer to understand what qualifies and what does not. A legal professional can guide you on what you should receive as maintenance, or how to garner tax exemptions through maintenance payments.
Why is Full Disclosure Required to Divide Marital Assets?
Whether you are living in a Community Property State or an Equitable Distribution State, full disclosure has become a must in all divorce and separation agreement. Both the spouses are required to make full disclosure of all material facts and information regarding the existence and valuation of all assets tangible and intangible.
“Full disclosure becomes extremely important as this helps in the distribution of the asset
to the appropriate party. It also helps in prevention of divorce frauds, errors and omissions. Conflicts-of-interests, and negative tax consequences cropping up at a later stage is also remarkably reduced.” says a renowned divorce attorney from Chicago.
This also helps your lawyer in determining the actual value of your assets, not just the current value. An expert can guide you which assets will be best for long-term and short-term financial security.
When You Cannot Reach an Agreement?
It is not uncommon that spouses are not able to come to an agreement regarding the distribution of wealth and assets. In such cases, your lawyer will make an application to the court to come to a settlement. The court comes to a fair decision keeping a few factors in mind. These include age of the individuals, length of the marriage, standard of living enjoyed by family prior to marriage breakdown, the welfare, and concerns of the child, earnings and income resource, financial obligations and responsibilities of both spouses as well as medical conditions of both.
It is important to understand that divorce proceedings are complicated and overwhelming. They can take a toll on your mind and body. Dealing with finances and asset distribution can get really difficult. Have an expert attorney and a finance professional to help you sort out the division of wealth. Be firm in your decisions and make sure you do not get a raw deal. Make your family and friends your closest emotional anchors right now, because they will be the ones who will have your back.