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Rushing through divorce proceeding can be costly
Splitting up with one's spouse can have a drastic effect on one's emotions along with one's finances. It is natural for a person in Illinois to want to get the divorce process over and done with as soon as possible. However, rushing through the process can be costly in the long run.
One of the first important steps to take when going through divorce is to examine all of the assets in existence. These include current accounts along with noncash assets and future interests, such as start-up stock options, pensions and business interests. Any income that was earned prior to the marital split-up but will be received afterward, such as bonuses, must also be included.
One should also pay attention to the tax implications of various divorce settlements. This involves comparing nontaxable assets with taxable ones. For instance, the party getting the $200,000 marital home faces different tax circumstances compared to the party getting an individual retirement account, or IRA, with $200,000 in it. The tax on a traditional IRA makes the IRA not worth what it appears to be worth on paper.
Protecting college savings plans possible during divorce
Individuals going through marital dissolution in Illinois may naturally focus on how they will divide monetary assets and address the family home. However, one question that many people never consider before getting a divorce is what will happen to college savings accounts. These include 529 assets that have been accumulated for the benefit of one's children.
One concern that a divorcing individual may have is that his or her ex in the future could change a 529 account's beneficiary from the child for which the funds were originally intended to himself or herself, for his or her own college expenses. The person could also decide to withdraw the assets for a child he or she has with a future spouse. It is for this reason that it is necessary to spell out in a separation agreement that the 529 savings plan's funds should be used only for the beneficiary named.
Other various options are available for addressing a child's savings during a divorce proceeding. For instance, a person could establish a trust or divide 529 assets into two separate accounts within a single program. An existing 529 plan could also be modified to a custodial account.
Divorce typically follows holidays and summer vacation
Although people in Illinois decide to get divorced all times of the year, August appears to be the most popular month for dissolving a marriage. The next most popular month for divorce filings is March. These two months are considered peak months for ending a marriage for multiple reasons.
The holiday season is not a preferred time for getting a divorce simply because people want to remember the holidays as a happy time. In addition, sometimes people try to hold out during the holiday season with the hopes that their marriage will be rekindled during the holiday season. The same is true for the summer months, during which people might try to make their marriage work during the family vacation season.
During periods of economic recession, divorce filings typically go down altogether. These are periods of uncertainty, during which a person or his or her spouse may be laid off and need to financially depend on the other party. In the same way, getting divorced when the real estate market is sinking is also not the best idea because of the uncertainty of the financial aftermath of the situation.
Splitting up assets can cause stress during divorce
An Illinois divorce is usually a stressful process full of emotional and the financial struggles. Financial battles in particular can occur over valuable assets. A couple of tips might help people to protect their financial interests during divorce.
First, it makes good sense to list all of one's debts and assets. In doing so it, is beneficial to specify who is responsible for each debt as well as who owns each asset. Any debts accrued or assets accumulated before the marriage typically remain with the parties who brought them into the marriage.
When dealing with the division of marital assets and property, what might appear to be equal very well might not be. As an example, a home that is valued at $200,000 is really worth only $100,000 if there is a $100,000 mortgage on it. Thus, the $200,000 house cannot be considered as equivalent to a retirement plan worth $200,000, even though it appears to be that way at first glance on paper. Moreover, the house requires upkeep, which must be considered when comparing it to other assets.
Best interests of child important when dealing with child custody
Divorce in Illinois offers the benefit of allowing two people who are unhappy in a marriage to finally break free from the marriage and live their own lives. However, when children are involved, the divorce process can be especially challenging. A couple of tips may help people dealing with matters related to child custody to navigate the divorce process successfully.
Divorce can be a painful experience, signifying the failure of a union that was intended to last until death. When a couple's marriage has died and they must part ways, it is easy to overlook who should receive which assets they owned together. A recent article explains what to expect in California when dealing with the division of shared assets and the decisions concerning alimony and child support during a divorce proceeding.
First, it is imperative that two divorcing parents help their children to feel safe. This means working to allow the children to process how they feel about the dissolution of their parents' marriage. However, it is wise for the parents not to share their own feelings with the children. Parents can process their own feelings and thoughts with the help of supportive pastors, support groups, family, friends and counselors.
Prenuptial agreement may help during divorce
Two young people who have very little in assets before they get married usually do not have much to lose by putting their assets together. However, the situation may be much more complicated for two people in Illinois who are getting married later in life. In this case, a prenuptial agreement may be helpful, as it can protect one's assets in the event of a divorce in the future.
A prenuptial agreement is a legal contract that explains what will happen to a couple's assets if the couple were to get divorced in the future. With this type of agreement, both parties can identify exactly what their assets were when they got married, which will help them to prove what items they brought into the marriage if they end up getting divorced. A prenuptial agreement is enforceable only if there has been a fair and full disclosure of both parties' liabilities and assets.
When two older individuals enter a marriage with their own sets of assets, they may choose to keep their assets separate in an effort to protect their heirs. This is especially critical for individuals who have been in multiple marriages and have children from previous marriages. Then, they can treat any assets they build together while they are married as joint assets.
Protecting financial resources is essential following divorce
Divorce in Illinois can naturally lead to heartache, but it can also be painful financially. This is especially true for a couple with high-value assets. A couple of tips may help people to protect their financial resources during the process of divorce in Illinois.
First, it is wise for people to protect themselves and their families with insurance. Following the dissolution of a marriage, purchasing new insurance is sometimes not high on the priority list for a person. Single parents, however, might need insurance more than ever before in order to better cope with unexpected life changes. Life insurance is essential and so is the creation of a will.
It is also wise to re-examine one's retirement plans following divorce, as these plans will likely have changed. A tax adviser may help one to comprehend the state and federal laws regarding the division of retirement accounts. A divorce agreement that addresses the division of a retirement account should ideally spell out that the account is to be divided, not based on a dollar amount, but rather based on a percentage. If a dollar-amount basis is used, one of the individuals may experience a huge loss if the market experiences changes.
Child custody often a sticking point during divorce
Going through divorce in Illinois can be overwhelming from both a financial and emotional perspective. The emotional stress that comes with divorce can affect not only the adults but also any children they share. Proper legal guidance can help those involved to navigate the divorce process when dealing with matters that involve the children, such as child custody.
Physical custody, which refers to where a child will live, is the area in which a majority of disputes crop up. When two divorcing individuals in Illinois are pursuing primary physical custody of their children, a family law court will usually require them to take part in mediation. In addition, a psychological evaluation may be required, and/or a person known as a guardian ad litem might be appointed for the purpose of representing the children. In a divorce proceeding, property division issues are always considered secondary to child custody concerns.
Beginning in January of this year, courts in Illinois actually stopped using the terms of visitation and custody. Instead, they talk about allocating parenting time and parental responsibilities. These responsibilities include extra-curricular activities, education, health care and religion. The details about these responsibilities have to be included in a parenting plan.
Steps that can help protect pocketbook during and after divorce
Divorce can put financial pressure on a person in Illinois in addition to taking the individual on an emotional rollercoaster. This can easily happen no matter how long the person has been married or how many assets have to be divided during the divorce. A couple of tips may help people to safeguard their pocketbooks during and after divorce.
One of the biggest mistakes people make when going through divorce is failing to budget. Without creating a specific budget, a person can easily lose track of his or her expenses. A budget can help a person to avoid overestimating and underestimating his or her expenses, especially when these expenses include costs such as child support or court costs.
It may also be wise to avoid keeping the family home when dealing with property division during divorce. This is because it is easy to determine the values of some assets, such as bank accounts. However, valuing a house can be more challenging, as a person might not be able to get as much out of the house as expected when it comes to liquidating this asset.
Knowing one's financial situation wise during divorce
The divorce process often leaves two parties wounded in Illinois. This is because divorce can be emotionally challenging as well as financially damaging. A few tips may help people to navigate the divorce process.
First, it is important for people to gather their financial records. It is ideal to have documents from the past five years, including payroll stubs, tax returns, property information, investment accounts, benefits information and bank statements. It is wise to create copies of all of these documents and then store them outside of the home. Having access to all financials will help to speed up the divorce and will safeguard a person in the event that something ends up going missing.
It is also wise to inventory one's assets. Separate property refers to any property that one owned before getting married, including any inheritances or gifts given specifically to one. Any items accumulated during marriage are typically considered marital property. Understanding one's financial situation is also important to emerging from a divorce as financially healthy as possible. This includes knowing one's credit score and paying attention to one's outstanding debts.
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