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DuPage County divorce attorneysSpouses who are getting divorced can, and often do, fight about virtually anything, but issues involving money are often among the most difficult to resolve. This can be especially true if one or both spouses have substantial wealth or high net-worth. However, planning is important for divorcing couples, no matter how much money they have. If you and your spouse are considering a divorce, there are some things you can do to protect yourself and your assets.

Gather Relevant Information

When you were getting married, you probably did not wait until a week before your wedding to start looking for a caterer or venue for the reception. Unfortunately, many people approach divorce in exactly this way. They do not do anything about the situation until their spouse actually files the petition for divorce.

It is a good idea to start preparing as soon as divorce becomes a real possibility. There is absolutely no harm in getting financial information together. Most experts recommend going back about five years and gathering as much as you can, including account statements, transaction receipts, tax returns, credit card bills, investment paperwork, and any other items that could provide details about your finances. If you are unsure about a particular document, keep it just in case. Make copies of everything and have them available for your lawyer and the court once the proceedings get started.

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DuPage County family law attorneysIt is an unfortunate reality that divorce can sometimes bring out the worst in people. When a marriage is ending, spouses can sometimes act in ways which deplete the martial estate. They may purposely waste marital funds so that the other spouse does not have access to them or they may have an expensive drug, alcohol, gambling, or shopping addiction which drains the estate. If you are getting divorced and your spouse has squandered shared assets, you may be able to recover these assets through a dissipation claim.

Illinois Law Regarding Dissipation of Assets

The term “dissipation” generally means to waste or spend resources frivolously or recklessly. With regard to divorce law, dissipation occurs when a spouse uses marital funds for a purpose not benefiting the marriage after the marriage has suffered an “irretrievable breakdown.” There is some ambiguity about what exactly constitutes this breakdown, but it is generally defined as the moment that a married couple ceases attempts at reconciliation. In other words, an irretrievable breakdown occurs when divorce is imminent.

Examples of Dissipation

The Illinois Supreme Court has defined dissipation as the sale or use of marital property “for the sole benefit of one of the spouses for a purpose unrelated to the marriage.” This means that using marital funds for household bills or a mortgage payment is not dissipation. If a husband used thousands of dollars of martial funds on a vacation for him and his secret girlfriend during the end of his marriage, it is very likely that this would be considered dissipative. Similarly, if a wife has a substance abuse problem and spends a significant amount of money on drugs after the breakdown of her marriage, her spouse could claim dissipation. Spouses may also be able to file a dissipation claim when marital property “goes missing” and the other spouse cannot account for why the money or property was used.

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DuPage County divorce lawyerOne of the most complicated parts of the divorce process is often the division of martial property. We generally think of marital property as physical items like fine art, collectables, or vehicles. However, these are not the only assets which must be divided. Retirement assets like pensions and 401(k) accounts must also be addressed during an Illinois divorce. Due to their nature, these assets cannot simply be sold and the proceeds split between divorcing spouses. According to Illinois law, there are certain steps that must be taken to ensure that retirement accounts are divided fairly during a divorce.

Valuing a Pension for the Purposes of Divorce

There are two major factors which influence how a pension is handled during a divorce. First, a determination must be made about whether the pension is marital property or separate property. In Illinois, only marital property, or shared property, is divided between divorcing spouses. Marital property generally includes property which is acquired by either spouse during the course of the marriage. However, it can also include comingled assets which started out as separate property but then became mixed with marital property. Often, the value of the pension that accrued throughout the marriage is deemed marital property and the portion of the pension present before the marriage is considered separate property.

The second factor which influences how retirement accounts are divided during divorce is what type of retirement plan it is. Some pensions are “defined contribution” plans which involve a specific amount of money being taken out of a person’s paycheck each pay period which will go into the retirement account. Defined benefit plans, on the other hand, involve employer-provided payments during retirement. Defined contribution plans are often much easier to value than defined benefit plans.

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DuPage County asset division lawyerOne of the most challenging aspects of a divorce can often be determining how property will be divided. Illinois law dictates that only marital, or shared, property should be divided during a divorce and that non-marital, or separate, property is not. However, it can be hard to determine what property is considered marital and what property is considered separate.

Untangling two individuals’ finances and assets during divorce can be a complicated endeavor – especially if the couple is not able or willing to negotiate. In some situations, property decisions are left up to the judge assigned to the case. The judge will then use a method of property division called “equitable distribution” in order to assign property to each spouse.

What Is Considered Non-Marital Property?

Separate property is not subject to equitable division and will be assigned to the spouse who owns it during divorce. Separate property generally includes:

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Naperville divorce attorneysWhen a couple is getting divorced, any retirement assets they may have are among the most critical assets to divide appropriately. Instruments like 401(k) accounts and pensions must be divided between the spouses, because most spouses will not have planned for retirement without at least some of those funds being present. However, unlike many other assets, it is not generally possible to simply split the proceeds of a retirement account down the middle. There is a specific procedure that must be followed under Illinois law to ensure that the asset is divided equitably.

Determining a Pension’s Value

Two factors go into determining the value of a pension for purposes of marital property division. The first is whether or not the pension is, in fact, marital property. Generally, the value of the pension that accrued during the marriage is considered marital property, and the value that was there beforehand is not. Some judges may hold that these funds have commingled, but such a determination is dependent upon the facts of your particular case.

The second factor involves assessing what type of plan it is. Some pensions are called defined contribution, with a specific amount taken out of one’s check each pay period, while some are defined benefit, which is fairly self-explanatory. Defined contribution plans are fairly easy to value if one has statements at hand because the amount contributed is consistent and clear. Defined benefit plans, by comparison, are more difficult and usually require specific expertise from a financial professional before a number can be determined.

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