Getting divorced is not easy. There are a wide variety of legal issues that will need to be addressed before your marriage can be dissolved, and in addition to dealing with these matters, you may also be struggling with emotional difficulties and financial concerns. Managing all of these issues can be overwhelming, but making the right decisions during the divorce process can help you make sure you are prepared for success as you move on to next phase of your life.
One of the key issues to be addressed during your divorce is ownership of the property you own. Disputes over property can sometimes become very contentious, since you and your spouse may both have emotional attachments to certain items, and you will also want to make sure you will have the financial resources you need once your divorce is complete. As you address these issues, you will want to work with a Downers Grove divorce attorney who can help you understand your rights and advise you on how to make the most financially beneficial decisions.
Equitable Distribution of Marital Property
One of the first things to understand about property division is whether different assets are considered marital or separate property. Marital property, which includes all property acquired by either spouse after getting married and before a legal separation, must be divided between spouses during divorce. Separate property, which includes property owned by a spouse before getting married, property received through an inheritance, or property excluded from the marital estate by a prenuptial or postnuptial agreement, will not be subject to division between spouses.
Some states require marital property to be divided equally between divorcing spouses. However, Illinois uses the principle of “equitable distribution” when dividing marital property to ensure that each spouse receives a fair and equitable portion of the marital estate. Decisions about how property is divided may be based on each spouse’s income and financial resources, their individual needs, how decisions about child custody would affect spouses’ financial situations, whether one spouse will receive spousal maintenance (alimony), and a variety of other factors.
Different Types of Marital Assets
There are many types of property that will need to be considered during divorce. These include:
- Money and bank accounts – In many cases, cash, bank account balances, or investments may be divided equally between spouses, although in some situations, one spouse may keep a larger portion of these assets, while the other spouse keeps other items of a similar value.
- Household items and personal belongings – Couples often acquire many different types of items during their marriage, and they may need to determine how to fairly divide property such as furniture, kitchen utensils, tools, electronics, or exercise equipment. In some cases, both spouses may have attachments to items such as family photos or children’s toys, and they may struggle to come to agreements on who will own these types of property.
- Valuables – A couple may own high-priced items such as artwork, jewelry, designer clothes or furniture, or collectibles such as sports memorabilia. Appraisals may need to be performed to ensure that these items are divided fairly alongside other property.
- Vehicles – In many cases, each spouse will retain ownership of the vehicle they primarily drive. However, arrangements may need to be made to address disparities in the value of these vehicles. For instance, if one spouse’s car has been paid off, while ongoing payments are being made on the loan for the other’s vehicle, the spouse who is still making payments may receive a larger share of other property to address their ongoing financial needs.
- Retirement accounts and pensions – Funds saved in accounts such as 401(k)s or IRAs are generally considered marital property if contributions were made to these accounts while a couple was married. When making transfers from these accounts during a divorce, a qualified domestic relations order (QDRO) should be used to avoid taxes and penalties for withdrawing funds before reaching retirement age. If one spouse earned pension benefits during their marriage, the other spouse may be entitled to receive a portion of these benefits when they begin being paid out after retirement.
- Real estate – Spouses will need to determine how to handle ownership of their marital home, as well as vacation homes or any other properties they own. A home may be sold, and the spouses may divide any profits earned, or one spouse may retain ownership of a property after buying out the other spouse’s share of the equity and refinancing the mortgage in their own name.
- Business interests – A business that was founded or acquired during a marriage will be considered marital property, and a business valuation may need to be performed to determine the full value of the business assets owned by the couple. While a business may be sold during divorce, allowing the spouses to divide any profits earned, in many cases, a business owner will want to keep a family business in operation. In these cases, one spouse may purchase the other spouse’s share of the business, or spouses may choose to continue co-owning and co-managing a business following their divorce.
- Pets – While family pets are considered property that must be divided along with other marital assets, some additional considerations may apply. When addressing “custody” of pets, an animal’s best interests may be considered, and ownership may be awarded to the spouse that spent the majority of the time caring for an animal and meeting its needs, including feeding the pet, grooming it, playing with it or taking it on walks or to vet appointments.
- Debts – In addition to the assets and property a couple owns, spouses will need to determine who is responsible for paying any debts they owe. All debts acquired during a marriage must be considered, and these may include credit card debts, student loans, auto loans, and home mortgages. In many cases, it is a good idea to pay off as many debts as possible before getting divorced, but spouses may also need to make arrangements to refinance loans in one spouse’s name or have one spouse removed from joint credit card accounts.
Addressing different types of assets can often be a complex undertaking for divorcing spouses. By working with a DuPage County property division lawyer, you can be sure to understand the ramifications of the decisions you make, and you can be prepared for financial success after your divorce has been finalized.