Creative Solutions for Equitable Division of Marital Assets in Illinois Divorce
Illinois is an equitable distribution divorce state, meaning that all assets the spouses accumulated during the marriage, or any assets brought into the marriage that become marital property due to commingling, are divided equitably in the divorce. This usually, but not always, means the marital assets are divided equally.
Equitable distribution does not necessarily mean that every asset is split down the middle. Barring special circumstances that entitles one spouse to receive more than one-half of the marital assets, each spouse will be awarded 50 percent of the total value of the marital estate and 50 percent of all marital debt. This means that the spouses can get creative in how the assets are divided.
Equitable Division of Marital Assets – A Case Study
John and Cathy have been married for 12 years. Let us assume that the marital assets are as follows:
|Total Net Value||$359,500|
The net value of the marital estate reflects a deduction of $295,000 for the mortgage. Assuming a 50-50 split is the most equitable division, each spouse would be entitled to $179,750, with the mortgage being paid (presumably) from proceeds of the sale of the home.
Let us further assume that this couple has two children, and they agree that Cathy will get primary physical custody. To make the
divorce as easy on the children as possible, Cathy wants to keep the house, so the children can remain in familiar surroundings and continue at their neighborhood school. She also wants one of the vehicles, as well as cash in order to continue to meet the family’s basic daily living costs.
The balance sheet looks like this:
After dividing these assets, Cathy is still entitled to an additional $29,750 of the marital estate, while John still needs $145,250 in order to achieve an equal distribution. But there is no single asset left that would equal those amounts – must Cathy resign herself to giving up the house and relocating her children? Not at all, and this is where an attorney is invaluable. Coming to a solution in this case requires not only creativity, but a sensitivity to the needs of both parties and an ability to collaborate with both parties to reach a mutually agreeable solution.
What options are available?
Give up the pension. If Cathy is willing to trade her present interests (keeping the house) with her future interests (having an income stream at retirement), she could give up $29,750 of her interest in the pension.
Give up the cash. If Cathy is not willing to trade on her future security, another option is to give up her right to all of the checking and savings accounts (although this would still put her at a small deficit). This could be an attractive option if she came into the marriage with separate property that would give her access to cash in order provide for the family’s everyday needs.
Future division of home sale. Some couples have successfully negotiated an agreement where they agree to divide the estate equally – but not all at once. In these cases, one spouse (Cathy in this example) would retain the house, contingent on her selling it when the youngest child leaves for college and paying John one-half of the home’s present value, plus interest.
These are just some of the possible solutions to Cathy’s dilemma. So long as the parties are willing to work together, and have a divorce attorney who understands each party’s needs and desires and can work with them to reach a decision that is in the best interest of everybody, there is no end to the ways the marital estate can be divided.
Palatine, IL Divorce Attorney
Going through a divorce is an emotional time, and trying to figure out how to equitably divide the marital assets can make it that much more stressful. If you are getting divorced, you need a skilled
Illinois divorce attorney who can work with both sides to reach a mutually agreeable solution. As a trained mediator, Nicholas W. Richardson has the experience to ensure that your best interests are protected, while at the same time keeping the adversarial portion of the process to a minimum. Contact the Law Office of Nicholas W. Richardson, P.C., today for a consultation.