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Divorce process can be financially complicated
An Illinois divorce is a complex process that may cause a person to feel as though his or her life is spiraling out of control. Many struggle to cope with the emotional challenges of divorce along with the financial ones. A couple of tips may help to navigate the divorce process successfully.
First, it is critical to create copies of all financial records and statements. Producing copies of savings and checking accounts might be obvious. However, it is also important to have copies made of retirement accounts and 401(k)s, tax returns, insurance policies and other financial documents. Once this information has been collected, it's wise to store them in a secure location.
Second, it is smart to obtain a copy of one's credit reports. Efforts can be made to improve scores that have been impacted by financial issues within the marriage. If no individual credit has been established, now is a good time to start creating it. Opening an individual bank account and obtaining a personal credit card are important steps in becoming financially independent.
Retirement accounts require attention during divorce
Going through the divorce process in Illinois can be costly both financially and emotionally. One of the major areas of contention during this type of family law proceeding is the division of assets. A few tips may help people going through divorce to specifically address matters involving retirement savings.
The different types of retirement accounts call for different types of paperwork. A legal document known as a qualified domestic relations order, or QDRO, may be used to ensure the proper distribution of a person's 401(k) funds. The document divides the retirement account with a party, such as a dependent, spouse or ex-spouse, and asserts that it is within each person's right to have some of the money.
The benefit of a QDRO is that it eliminates penalties or taxes from taking any early distributions of the retirement plan. All employer-sponsored retirement plans and pensions require separate QDROs. Meanwhile, individual retirement accounts, or IRAs, require what is known as a transfer incident — which also allows a person to move funds without creating unnecessary tax burdens.
Prenuptial agreement valuable in the event of divorce
The word prenup usually elicits negative emotions when it comes to relationships. However, a prenuptial agreement can be a huge help for those who are ready to get married but want to protect their assets in the event of divorce. This is especially true for older individuals in Illinois who are bringing a lot of assets with them into their marriages.
People naturally believe that their marriages will last. However, sometimes the person one marries ends up changing and becoming a totally different person years down the road. The benefit of a prenup is that it does not just protect one's assets and income but also addresses other important details, such as liabilities, which makes it relevant to people of any economic class.
In a prenuptial agreement, people can spell out who will end up with the marital home if a divorce happens. They can also explain what will happen to a person's 401k. This type of agreement is especially valuable for those who are interested in giving up their careers to raise children, as a prenuptial agreement can establish a standard for the needed alimony should a marriage dissolve. A prenup can also be important for those who own their own businesses.
Protections may help people receiving spousal maintenance
One of the biggest areas of disagreement during divorce in Illinois has to do with alimony, or spousal maintenance. Even if a person ends up receiving spousal maintenance, a challenge may arise if the person paying the spousal maintenance suddenly gets into an accident that keeps him or her from being able to return to work, for example. A few tips may help people seeking spousal maintenance during divorce to financially protect themselves in such a situation.
If the spouse who is paying spousal maintenance is no longer able to pay it or simply decides to stop paying it, the recipient of the spousal maintenance has the right to seek relief via the court system. However, enforcement actions may cost money and take time. Fortunately, certain protections can be put into a divorce agreement for the benefit of the spousal maintenance recipient. One is a provision securing the payments by a recorded security interest against a piece of real property that the paying spouse owns. If the paying spouse does not pay on time, then the security interest could be enforced at a certain default interest rate.
Decision about family home major part of divorce
Purchasing a house with a spouse in Illinois is one of the biggest moves two people will make together. It is therefore understandable why figuring out what to do with the marital home during a divorce is an important decision. In some cases, both individuals agree to simply sell the home and split the proceeds.
An important step in selling the family home during a divorce proceeding is to get the house ready for showings. Staging the house might entail tasks such as doing repainting and minor repairs. It is necessary for both spouses to come to an agreement on where the money needed to complete these jobs will come from. Also, if one of the spouses is still living in the house, it is wise for him or her to de-clutter and clean the residence before showing it.
Both parties can also be a part of the process of reviewing any offers made on the home by potential buyers. Although the agent may provide advice, the final decision belongs to the two spouses. Once the house is sold and all obligations are paid, the escrow company is generally able to distribute the proceeds.
A few simple steps may make divorce process simpler
Divorce is essentially a complex solution to complex marital problems. However, although a divorce proceeding is characterized by emotional upheavals and complexities, it can be made simpler. A few simple steps may help individuals going through divorce in Illinois to complete the process more easily.
First, it is wise to gather the financial documents belonging to both parties in the marriage and then organize them in a single place. It may even be necessary to buy a multi-section file folder for keeping these papers organized. One important document to obtain is a mortgage statement, which includes all information related to a jointly held property.
Divorcing individuals in Illinois would also be wise to get their retirement account statements, along with pension plan statements and 401(k) information. Credit card statements and checkbook registries for the previous year are also needed. Finally, investment account statements, bank account statements and statements for long-term debt accounts are important to gather. Putting all of this information together allows one to develop a thorough overview of how one's money was spent the previous year and what has to be paid in the year ahead.
Third-party trust may be area of contention during divorce
During the process of divorce in Illinois, one of the biggest concerns a person may have is how to handle asset distribution and property division. After all, the decisions made during the divorce will impact the individual's ability to be financially secure in the years following the divorce. Third-party trusts may especially be a source of contention during divorce.
An example of a third-part trust is one that is created for either the wife's or the husband's benefit by the individual's parents or grandparents. The question is if a woman who is getting divorced and has income from this type of trust that is specifically intended to provide for her welfare, support, education and health, does she have to give some of this income to her ex? Legal cases that have examined this type of question are often appealed to a higher court. Thus, if a person is ordered to divide his or her trust fund dollars with his or her ex, the person may wish to appeal.
One way to prevent this difficult situation is to have the parent or grandparent setting up the trust include language designed to guard against the inclusion of the trust in a divorce settlement. A person may even have the trust's terms emphasize that it should never be deemed a marital asset. Marital assets legally have to be divided in a divorce.
Stevie Wonder will pay $25,000 per month in child support
In Illinois, child support can be a cause of conflict between two parents who are going through the process of divorce. In most cases, child support obligations come to an end when the child reaches the age of 18 or becomes emancipated — for example, he or she marries or joins the military. In one recent out-of-state case, well-known and recently divorced singer Stevie Wonder has been ordered to pay a whopping $25,000 in child support.
Wonder and Kai Millard Morris, his second wife, finalized their divorce on a recent Monday. They had initially filed for divorce in 2012. The two individuals will share custody of the two boys they had together, ages 10 and 14.
In addition, Wonder will be responsible for the child support costs. Wonder has a total of nine kids from five women. His youngest child was born in Dec. 2014; named "Nia," he had her with his current girlfriend, Tomeeka Robyn Bracy.
In Illinois, courts typically follow statutory child support guidelines, although a deviation may be necessary if two parents share joint physical custody of the kids. A modification of an existing child support order may also be granted down the road if either one of the parents' life situations change substantially, and the court determines that a change in the amount of child support being paid is necessary under the circumstances. Each party has the right to rely upon legal counsel to pursue a fair outcome and ensure that their rights are protected in court when addressing child support matters.
Child custody matters may be confusing to toddler
During a divorce in Illinois, the kids are sometimes caught in the middle when their parents are battling over child custody. This is difficult for children at any age, but it can be uniquely challenging for a toddler. A few tips may help divorcing parents to prepare a toddler for the change to come while dealing with child custody issues.
First, it is important to describe to the toddler how the divorce will specifically impact him or her, as toddlers are literal, concrete creatures. For instance, a mother may explain that she and the child's father will live in their own houses and the child will get to live at both homes. It is also expedient to tell the child that this arrangement is permanent. The more detailed a parent can be about the child's new living situation, the more prepared he or she will feel.
It may also be beneficial to use language that is black and white when describing the divorce rather than sugar-coating the situation. A toddler does best when spoken to with simple, concrete language featuring a clear message. Explaining that the mother, dad and toddler will remain a family even after the split-up might confuse the child and give him or her false hope that his or her parents will live together again.
Divorce involving family business may be tricky to navigate
People in Illinois naturally hope that their marriages will bring them happiness forever, but, unfortunately, divorce is sometimes unavoidable. Divorce is challenging for any couple, but it is especially nightmarish for a couple who co-owns a business. A few tips may help married people who own businesses together navigate the complex divorce process.
A prenuptial agreement can come in handy for protecting one's assets in the event of divorce. This agreement explains how a business will be divided if the couple who owns the business decides to split. Establishing a buy/sell agreement is also a wise move when a married couple first sets up its business, as this is also helpful for protecting one's assets.
If a person going through a divorce has not completed these steps, he or she may benefit from sitting down with his or her future ex-spouse to figure out how they would like to go about dealing with the business. A collaborative divorce process may be used, as it allows both parties to meet in a manner that is non-confrontational to explore options and begin negotiations. Any conflict or family-related issues are managed in a constructive and respectful manner.
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