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Grotta & Associates Family Law Blog

Handling your finances during a divorce

When couples with significant assets choose to divorce, there is often a temptation on both sides to act in their own best interests and begin seizing assets for themselves, potentially complicating the divorce process later on.

This is particularly complicated when the couple shares access to financial accounts. Many couples do not understand the divorce process thoroughly enough to realize that the actions they take in their own self interest may actually come back to hurt them further down the road, and may even result in punitive action from a court.

Media hype and stories from friends can hurt you in a divorce

We all glean information from a variety of sources. Doing so helps us form well-rounded and informed opinions on a variety of topics. In some situations, accepting advice from friends with personal experience can help you make the best decisions. Other times, information from television, movies and other media sources can help you as well. However, divorce is absolutely not one of those times.

When you consider a potential divorce, you need accurate information that reflects the laws in Illinois and common practices, not worst-case-scenarios that are lurid enough to draw media attention. Advice from well-meaning friends can also fall flat in the face of the dissolution of your marriage. You should seek guidance from those who understand the court processes and likely outcomes, not people with topical or inaccurate ideas about divorce.

Do you have reason to worry about your prenuptial agreement?

When people sign a prenuptial agreement during their engagement, they often imagine doing so is unnecessary. They intend to have their marriage last forever, only to discover that simply won't be the case later in life. In many cases, it is only when a marriage starts to fall apart that spouses may carefully consider the contents of their prenuptial agreement.

It's only natural to want to protect your assets in a divorce. A properly executed and drafted prenuptial agreement can do exactly that. Educating yourself about Illinois prenuptial agreement law will make it easier to predict if the courts will honor your agreement.

How will an Illinois divorce affect your plans for retirement?

There are many uncertainties involved in getting a divorce. Unless you and your spouse agree on specific terms for asset division and other issues via a prenuptial agreement, uncontested divorce or negotiated terms, the courts will end up making the major decisions. Since every marriage and every divorce is unique, it's impossible for anyone to accurately predict the exact outcome of your divorce.

However, a review of state law and common practices can help you understand the likely outcome of certain aspects of your divorce. One issue that particularly concerns divorcing couples aged 40 or higher is the potential impact of the divorce on retirement accounts. The larger and more complex the assets you've acquired during marriage, the more uncertainty there may be about their allocation in a divorce. Certain rules and practices, however, will guide the court's decision-making process.

Dissipation of marital assets can impact the division of assets

Divorce can bring out the worst in some people, leading them to do things that they usually wouldn't consider. Sometimes, for example, one spouse may take steps to intentionally hide marital assets from the other. They do this in the hope that it will result in more assets for them when the courts finalize the divorce. If caught, the person hiding assets could end up receiving much less as a result of this attempt.

Another common behavior immediately prior to divorce is dissipation of marital assets. At its most basic, this refers to when one spouse uses marital assets for something other than the marital union during the breakdown of the marriage. There are many forms that dissipation can take, and they can definitely impact the outcome of the asset division process.

Protecting your assets: Negotiating during high-asset divorces

A high-asset divorce has the potential to drain your income quickly, especially if you and your spouse can't come to an agreement on how to split your assets. Fortunately, there are alternatives to spending too long fighting each other. You can choose arbitration or mediation to help you resolve your issues quickly while protecting the assets you want.

Arbitration and mediation help because they take less time and cost less. You and your spouse both go through the motions, so you can come up with agreements that work or have someone else determine what's fair in your particular situation.

Hidden assets can impact the outcome of your Illinois divorce

Once you've reached the decision that a divorce is the only solution to your marital problems, there are a lot of issues to consider. Divorce can impact your social relationships, as well as your financial situation. Most people want to know what to expect during the process of getting divorced and afterward, when they are rebuilding their lives.

Doing adequate research into both Illinois state divorce laws and case precedents can help you understand what to expect. It's critical to remember that no two marriages or divorces are the same, so nothing can completely and accurately predict the outcome to a divorce (other than an existing prenuptial agreement). If you and your spouse don't agree to terms, the courts will need to make important decisions on your behalf, including how to divide the assets from your marriage.

Don’t just get it over with, prepare your finances for divorce

There may come a point when you realize that divorce is the best way to escape a bad marriage. Although this is going to change your life in many ways, you should keep in mind that things will get better sooner rather than later.

Up front, it's important that you get everything in order. Here's something to keep in mind: You should never rush through the divorce process because you want to put it in the past as quickly as possible.

Don't do this during your divorce

Following your instincts and intuition is vital in life, but during your divorce proceedings, you might want to keep your "instincts" in check. This means that if your spouse upsets you and your instincts say it's time to raise your voice, consider taking ten deep breaths and seeing how you feel afterward.

There are many things you should not do during your divorce process. Common sense will dictate that you avoid most of them. However, your instincts could override your common sense and you might be tempted to do them anyway.

Pulling money from accounts before a divorce could cost you

You can tell that a divorce is inevitable because of the way you and your spouse feel about one another. Maybe there's been infidelity. Perhaps you've grown apart over time. Whatever the reason, it's natural to want to start planning for your future without your spouse. Don't get ahead of yourself by making major financial mistakes as you head for divorce court.

It's common to feel like you shouldn't have to support your spouse when a divorce is imminent. After all, if you're the one making the most money, why should someone who wants to leave you continue to benefit from all your hard work?

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