Divorce is a challenging emotional process that often involves complex issues and decisions. One of the key concerns for individuals going through a divorce is how to protect their assets. In the state of Illinois, understanding the relevant statutes and taking proactive steps to protect your assets can play a crucial role in safeguarding your financial interests during a divorce. In this article, we’ll explore some popular strategies to protect your assets during divorce, along with insights into the relevant factors judges look at when making decisions including:
- Equitable Distribution
- Community Property
- Pre/Postnuptial Agreements
- Full Financial Disclosure
- Marital vs Nonmarital Property
- Working with Financial Experts
What is Equitable Distribution in Illinois?
Illinois, among other states, follows the principle of equitable distribution when it comes to dividing marital property during a divorce. Equitable distribution does not necessarily mean equal. Instead, it is based off what the court deems fair. This will be based on various factors disclosed throughout the trial. These factors include the contributions each spouse made to the marital estate, the duration of the marriage, and the economic circumstances of each party.
Courts in states that follow the principle of equitable distribution will recognize the value of stay-at-home parents despite the fact that stay-at-home parents often do not have income or large assets in their name. Courts will not leave one partner destitute just because the other partner was the “bread winner”.
Community Property
Other states that do not follow the principles of equitable distribution instead follow principles of community property. Community property states will divide assets equally among both partners as they believe both spouses add equal value to the marriage. This means that all assets will be divided equally by value between the parties. They will either split assets evenly or sell them and divide the money earned between the parties.
Prenuptial and Postnuptial Agreements
One proactive way to protect your assets is by entering into a prenuptial or postnuptial agreement. These legal documents allow couples to define how their assets will be distributed in the event of a divorce, regardless of whether their state is a community property state or an equitable distribution state. While these agreements cannot be unconscionable or fraudulent, they can provide a clear framework for asset division. Both prenuptial and postnuptial agreements cover how businesses, property, debts, and even alimony will be handled in the case of a divorce. The only real difference between the two types of agreements is that one must be drafted several months before the marriage while the other is signed post-marriage.
To learn more about prenuptial and postnuptial agreements, check out our article titled “Why Is a Prenuptial Agreement a Good Idea?”
Full Financial Disclosure
During divorce proceedings in Illinois, both spouses are required to provide full financial disclosure. This includes revealing all assets, debts, and income regardless of source. Ensuring complete transparency in financial matters can prevent disputes and contribute to a smoother division of assets. If you are found to have been less than truthful on your disclosure, you may face legal consequences.
Protecting Non-Marital Property
Certain assets may be considered non-marital, or separate, property, and therefore may not be subject to division in a divorce. This can include property owned before the marriage, gifts, and inheritances. Keeping a clear record of the separate nature of these assets is crucial. Many couples keep separate bank accounts to avoid comingling of funds, which happens when couples combine assets. If accounts are kept separate for the duration of the marriage, then they will be considered non-marital property. Accounts that have been comingled will be considered marital property and can therefore be divided during divorce proceedings.
If you and your spouse own a home or business, asset division can become more complicated. Typically, evaluators will be hired to assess the value of the home or business, and parties will be given the option to buy the other’s share, sell and split the value, or spouses can choose to co-own the home or business. Especially if couples choose to use mediation as an alternative to traditional divorce proceedings in court, couples can arrange many different unique agreements to solve issues of asset division.
To learn more about how to split a house during divorce proceedings, check out our article titled “How to Split a House in a Divorce.”
Working with Financial Professionals
Consulting with financial experts, such as forensic accountants or valuation specialists, can provide a more accurate assessment of the value of assets. This can be particularly important when dealing with complex assets like businesses, investments, or real estate. The more complex your assets are, the more complex asset division can become. Relying on experts and getting timely evaluations can make a huge difference when dividing assets.
Relevant Illinois Statutes
There are many statutes in each state that judges must adhere to when coming to decisions in family court. In Illinois, many of these statutes are included in the “Dissolution of Marriage Act” which is a series of statutes that lay out the processes judges must follow. It can be helpful to read these statutes before going to court. It is also advisable to hire a qualified family law attorney in your area, like those at KGN Law Firm, that will know these rules and regulations inside and out. These statutes include, but are not limited to:
- 750 ILCS 5/503 – Dissolution of Marriage Act: This statute outlines the principles of equitable distribution and factors considered by the court when dividing marital property in Illinois.
- 750 ILCS 5/504 – Maintenance: Understanding the rules for spousal maintenance, also known as alimony, in Illinois is essential, as it can impact many financial aspects of your divorce.
Conclusion: How to Protect Your Assets During Divorce in Illinois
Divorce is a significant life event, and protecting your assets requires careful consideration and strategic planning. By understanding the relevant Illinois statutes and taking proactive steps, you can navigate the divorce process with a focus on securing your financial well-being. Consulting with an experienced family law attorney in Illinois is a crucial step in developing a strategy tailored to your unique situation.
MEET WITH AN ILLINOIS FAMILY LAW ATTORNEY TODAY
The Family Law attorneys at Koth Gregory & Nieminski understand that your family is the top priority, which is why we offer SAME-DAY APPOINTMENTS. If you need a divorce or other family law services, you can schedule your first meeting through our online appointment calendar. We look forward to meeting you.
Disclaimer: This article (How to Protect Your Assets During Divorce in Illinois) may contain information that is outdated as Illinois law continuously evolves. Meeting with an experienced family law attorney is the best way to ensure you are receiving the most current information on How to Protect Your Assets During Divorce in Illinois.
Published by Dustin Koth on November 27, 2024
