Financial Planning Considerations for Divorce
If you are facing divorce, you will have to deal with both short- and long-term financial concerns such as how to support two households on income that once supported one. The financial planning decisions you make will affect you and your families for years to come.
It is always better if you and your spouse can agree on how to divide property, but if you cannot, the Circuit Court will divide your marital estate. Illinois is an equitable distribution state, which means your property may not be divided equally, but in what the court considers to be a fair and just manner after evaluating your individual circumstances.
The laws regarding divorce and property are complex. In order to avoid making costly mistakes, it makes sense to consult an experienced divorce attorney to help you make financial decisions.
The seasoned and compassionate Illinois divorce lawyers at Wolfe & Stec, Ltd. always focus on our clients’ needs and feelings, and we work to clarify and resolve their divorce issues in the most effective and efficient manner. We offer a free consultation to help you find the best solution for your individual situation, so call or contact us online today.
Property Division in Divorce
Illinois courts can divide only marital property — assets you or your spouse acquired during the marriage and non-marital property that has been transferred into co-ownership and commingled. Separate property that you brought into the marriage, property excluded by a prenuptial agreement or other valid agreement, or property that you inherited will not be divided. Therefore, before distributing marital assets, the court must first categorize your property as either marital or separate property and then assign a monetary value on the marital property and debt.
Gathering and providing this information for your attorney, financial advisor, and the court requires diligent work and financial planning.
Financial Planning Steps
Before you begin the divorce process, you should take the following financial planning steps:
1: Collect documents.
You will need to give your attorney an accounting of your assets, liabilities and other financial matters. To do this, you should gather:
- Bank, annuity, and financial account statements
- Income tax returns, credit card and pay statements
- Real estate title and loan documents, including mortgage and credit card statements
- Insurance policies, including health, life, and long-term care documents
- Retirement and pension plan documents
- Business ownership records, such as operating and partnership agreements and financial and tax records
- A list of property owned by you, your spouse, or both of you together such as vehicles, collectibles, jewelry and artwork.
2: Examine Financial Considerations
The following are issues that may need to be addressed:
- Will one person get the marital home, and will one person move out and have to live elsewhere? How can two residences be afforded?
- How will your bills and family expenses be paid while divorce is pending?
- How will bank and credit cards and investments be handled?
- If you have children, what will custody arrangements be? How will child support factor into your financial situation? Do your children have special needs?
- What will happen to health insurance, especially if one spouse is covered through the other’s employment?
- What happens if one spouse hasn’t worked and may not be able to find a job immediately?
- What accommodations need to be made if one or both spouses are already retired?
- Are there complex financial assets such as stock options and other types of executive compensation, business ownership and private equity?
- What if one spouse suspects there are assets not being disclosed?
- How will receiving or paying alimony and/or child support or splitting up retirement accounts affect your taxes?
- What will happen to any retirement plans? How will these will be divided, and what you will do about your own retirement needs if your spouse winds up with these benefits?
- Who is responsible for things like credit card bills, medical expenses, auto loans, payday loans, or student loans?
- Is there a chance that you or your spouse may wind up filing for bankruptcy, and how can you protect yourself in that case?
- What are the costs of keeping and running the house, and what will costs be if you move?
Contact Us For Help
Financial planning decisions are complicated, and making a mistake could mean returning to court and costly battles that adversely affect you and your children. Fortunately, there is help available, and you may find comfort in knowing a lawyer is on your side. The seasoned Illinois family law attorneys at Wolfe & Stec handle all divorce cases with sensitivity, respect, and discretion.
At Wolfe & Stec, Ltd., we made our reputation one client at a time, and we put every ounce of our ability into every case. There are no ready-made solutions in divorce and family law – every case needs to be considered on its own merit. Our lawyers take the time to delve deeply into the problem and to understand your goals and concerns. Then we develop a legal strategy designed to achieve those objectives and allow you to keep as many marital assets as possible.
There is no charge for the first consultation. Delaying can only complicate your situation and make matters worse. Call us today or contact us online for your free consultation.