As a couple goes through a divorce, they must make significant financial decisions regarding the property, assets and accounts of the marriage. Under almost all circumstances, all possessions held during the marriage are considered marital property and split equitably. While this sounds like a straightforward formula, many variables and factors can complicate the division. You need skilled representation on your side protecting your interests and preserving your future for yourself and your children.
Buffalo Grove Divorce And Home Ownership Lawyer
At Buffalo Grove Law Offices, we are committed to guiding you through this process in a highly individualized manner that best positions you for the future.
Beginning the Process
To begin the process, the court will determine what kind of child support, custody and alimony agreements must be reached. The primary objective is to ensure that everyone involved in the divorce, including the children, is provided for.
Next, the court will assess how much property is involved in the division that needs to be made between the parties. Generally, houses and vehicles are the focal point of property division proceedings. Families that own and operate businesses must determine how those business interests will be divided and how business operations will proceed following the split.
Other accounts and assets are often overlooked in these divisions. These include retirement accounts, pensions and investment portfolios. These holds are often valuable and require skilled and knowledgeable guidance in their division.
Value of Assets is Determined as of the Date of the Divorce
We will assist in obtaining appraisals and valuations of all property, homes, businesses, accounts and other holdings. The value is generally assessed at the date of the divorce.
If the couple decides not to keep a certain piece of property, such as a home, we can help to liquidate those holdings and determine how the proceeds will be divided or used to pay other expenses.
We also assist with issues of dissipation. If one spouse has spent significant money on something unrelated to the marriage, the court can rule that he or she owes the other spouse for half of that amount.
Marital debt is considered marital property and must be considered during the divorce process. Marital debt is incurred while the parties accumulate marital property. Sometimes, if possible, it is a good idea to pay off marital debt during the divorce process. If that is not an option, then you must decide which party is responsible for which debt. Unfortunately, if you or your spouse takes on debt that you don’t pay off, the other party may become responsible to pay the debt themselves. The lender who you owe the debt to, whether it be for a house mortgage, car loan, home equity loan, etc. does not care that you are divorced. They will go after either one of you once, regardless of who the court says is responsible for the debt.
Therefore, it is important to include in the agreement, what action can be taken against the party that does not pay their share of marital debt.
If the court is going to divide the debt between the parties, the court will certainly consider who benefited most from the debt and who incurred it. If one party bought something that the other party did not benefit from, then the first party may end up being completely responsible for the debt.
Commingling takes place when, for example, one party puts marital money into a non-marital account. The commingling creates a right of reimbursement from the non-marital account to the marital estate, to pay back the marital portion. Take the example of a car that one party owned prior to the marriage. Let’s also suppose that the car has a small loan balance remaining due. If, during the marriage, you pay off his loan balance, you have added a marital share to the once-non-marital asset (the car). The car is still the asset of the party who originally owned it, but the marital estate is entitled to reimbursement. The unique facts of the reimbursement are determinative of whether there will be reimbursement at all.
Transmutation refers to situations in which non-marital property is converted into marital property during a marriage, and vice versa. There is no right of reimbursement or need for it, as the entire asset has become marital. Take the example of one party owning a house prior to the marriage, so that the house in a non-marital asset. during the marriage, the parties paid the mortgage, taxes, upkeep and utilities, etc. with marital money from their jobs. The house slowly takes on the identity of a marital asset, and is no longer a non-marital asset. The unique facts of each case will determine the end result.
The Marital Home
Usually this is the largest asset of the marital estate. There are many references to the marital home (marital residence) throughout this website. If the parties can agree to a value of the marital home, then there is no reason to go further to obtain an appraisal or other evidence of value. Sometimes, each party obtains his or her own appraisal, and those appraisals are different from each other. The Judge will most likely split the difference between those two values.
As with any asset, there must be a value given to the asset. Obtaining a valuation usually requires the use of an expert valuator for businesses. There are many approaches to valuation of a closely held business Experts may take into account the following:
- future earnings
- past earnings
- book value
- excess earnings
- comparable public companies
The burden of presenting the court with sufficient evidence to determine value is on both parties. The appraisal is as much an art as a science. Book value is relevant, but by itself is not a good measure of value. Sometimes parties don’t want to spend the money for a business valuation. The court is then free to use its determination of value for the business. That determination could include whatever the parties offer at trial. It is best to go to court with a sound valuation, so that you are best prepared for the outcome in court.
Inheritance and Gifts
These are both considered the non-marital property of the individual who either inherits the asset or is gifted the asset. As long as the party does not commingle the non-marital asset with marital assets or the non-marital assets of the other party, the first party is safe to claim that inheritance or gift for themselves. Throughout this website, you will find references to issues that arise because a party does not keep that non-marital asset safely in a non-marital location.
Stocks and Bonds
Stocks and bonds can be classified as marital or non-marital in nature, depending on the facts of the case. Stock options are options to buy stock at a set price at a stated time. They are usually non-transferable from the employee, because stock options are often an incentive to the employee to add value to the company. The options have value if the market price of the stock is more than the fixed option purchase price at the time that the option is to be exercised. The options are worthless if the market value of the stock is less than the fixed option purchase price. The difference between the fixed option purchase price and the market price of the stock could be taxed to the employee spouse at the employee’s ordinary income tax rates when the option is going to be exercised.
During the process of property division in a divorce, stock options that are granted during the marriage are presumed to be marital property, whether vested or not, and whether or not their value is determinable. The presumption can be overcome, as for other assets, by showing that the options were acquired by a method such as inheritance or gift.
A life insurance policy may or may not have any actual dollar value. If there is a value, then it is to be divided as an asset between the parties. However, as the child support or maintenance-paying party is usually required to maintain a life insurance policy, any life insurance policy may be set aside for this use. It, of course, depends on the value of that policy, as to how the court will make its decision as to who will own and pay for the policy.
There may or may not be retirement accounts to divide in the divorce process. It is often necessary to have the help of a professional retirement asset valuator, in order to know the valuation of the retirement asset. The retirement plan is usually divided by means of a Qualified Domestic Relations Order (QDRO). The QDRO is directed to the Plan Administrator, and orders the Administrator to divide the plan in some fashion. If each party has his or her own retirement plan, it may be possible to devise a method of dividing the plans without the use of a professional valuator.
However, one must take extreme caution in making decisions about these assets, without fully understanding the long-term repercussions. Are there surviving spouse benefits? Is there a death benefit that supersedes a surviving spouse benefit, and vice versa? What happens if the plan goes up or down significantly after the plan is divided in a divorce proceeding-can you prepare for that?
Pursuant to the terms of the divorce judgment, husband was to make three $5,000 payments to wife over a one-year period. Wife was also to receive specified marital property. Husband was to receive the remainder of the property. Each of the parties subsequently filed petitions for rule to show cause. Each alleged that the other…Read More
After court entered judgment of dissolution. Husband died. Then, wife (Jodi) filed 3rd-party complaint against Mary. Mary was husband’s wife at the time of his death. Jodi alleged that Mary was unjustly enriched because she was receiving a pension as surviving spouse of a disabled firefighter under Section 4-114 of Pension Code. The Trial Court…Read More
The parties divorce. In their agreement, they are each to make and keep in full force and effect a valid will. It is to provide that each of them will give and bequeath at least 50% of their net estate to their six children in equal shares. They also agreed to a remedy in…Read More
Neither party presented the trial court with expert opinion testimony as to the value of the marital residence and a piece of rental property. The husband testified as to his own personal knowledge of what he believed the combined values of the two properties were worth. The wife presented evidence as to the assessed value…Read More
At trial, the wife testified about and introduced into evidence several spreadsheets. She argued that they made a basic showing that the husband had dissipated over $160,000. In unaccounted cash withdrawals from his bank accounts from 2010 through the first half of 2016. Dissipation is the use of marital assets for the benefit of one…Read More
The wife filed a petition for dissolution for marriage. Husband filed an answer and counterpetition. He also filed a declaratory judgment action. He was asking that their antenuptial agreement was valid and binding. At the conclusion of the trial, the husband’s counsel requested the court to enter a judgment of dissolution. Wife objected. Husband had…Read More