Divorce rocks the finances of every couple, including those with higher incomes and assets. Weathering the fallout of the loss of a combined income and the division of marital assets is one of the hardest adjustments any divorced person must make. Knowing which assets to take and which are better off relinquished or sold is not easy, especially when factoring in the emotional attachment spouses form over certain items. However, finding the right balance is the only way most divorced individuals have a realistic chance of recovering from this financial shift. The marital home is the largest physical asset most couples own, and it often looms large in the property settlement process.
Equitable division is the rule that governs property division in Illinois, which means the court will look for a fair division of assets, but not necessarily an equal one. Under this system, a spouse may be required to argue why he or she should receive a certain asset. When addressing the marital home, specific questions should be asked before making a strong stance in favor of keeping this property.
Questions to Ask About Keeping the Family Home
In many cases, at least one spouse will form a strong attachment to the family home, and either spouse may find it difficult to think of selling the home or giving up ownership to the other spouse. Good reasons do exist for keeping the home, including providing continuity for children, maintaining some form of financial security, and the possibility of appreciation in value....
The end of a marriage can occur for a wide variety of reasons – from the somewhat innocuous and slow-developing issue of growing apart to extreme acts of betrayal and violence. Most couples are somewhere in the middle, but a legitimate question may arise when one spouse is convicted of a crime, and the other spouse must choose whether to continue the marriage or use this event to justify divorce. Depending upon the circumstances of the criminal conviction, the repercussions on the integrity of the marriage can be significant, and spouses may wonder what impact the conviction will have on the outcome of divorce.
Unless a person comes into a relationship with a criminal history, spouses typically do not anticipate this possibility nor necessarily know how to respond if it does happen. A recent example of this conundrum involves the marriage of a man accused of kidnapping and killing an international student at the University of Illinois Urbana-Champaign. His wife filed for divorce recently, citing irreconcilable differences and no possibility of reconciliation in her petition.
When couples divorce, it is common and understandable that each side wants to offer his or her perception of why the marriage did not last, but understanding what factors matter and why they will help to produce a more favorable outcome is crucial....
Getting the financial support a child needs to do well is a priority for all parents who receive this money. Often, this parent is the child’s primary caregiver, meaning without child support from the other parent, they would be solely responsible for the high cost of raising the child. Being a single parent has enough burdens without the added stress of not receiving regular child support and finding oneself struggling to make ends meet. Unfortunately, the child is the one who is the most negatively affected by this situation because the non-payment of child support means the child must forego certain opportunities.
The state of Illinois has a vested interested in both parents supporting their children and offers a number of enforcement options to compel payment. A standard consequence of failing to pay child support is the suspension of the delinquent parent’s driver’s license. However, starting this year, the penalty for being caught driving on a suspended license related to unpaid child support was reduced to a petty crime. Petty crimes are purely fineable offenses, whereas misdemeanors, the former classification for license suspension related to child support, could include jail time. Thus, the delinquent parent has less incentive to become compliant because the consequences for not paying are now lower. Child support enforcement should still be pursued, but this new change is worth noting.
Child support orders, whether issued as part of divorce or paternity proceedings, are not something a parent can choose to ignore without facing consequences. The parent receiving support is entitled to seek enforcement with the courts to secure this right for the child. The primary way a parent can ask the court to enforce a child support order is to submit a petition for contempt. Violating a court order is not permissible, and a judge can order a delinquent parent to settle the arrears that includes interest after 30 days, or the parent may face jail time until some portion of the amount due is paid. Probation may also be ordered, and if jailed, but released to work, a parent may have his/her wages garnished to settle the overdue amount. In addition, if the parent owns a business, the court can order the seizure of these assets to put toward the back child support....
Recently, Jeff Bezos and his wife, MacKenzie, announced via Twitter that they were going to divorce. Jeff Bezos is the founder of Amazon and is thought to be worth approximately $136 billion, making him one of the wealthiest men in the world. The public was soon shocked to learn that they did not have a prenuptial agreement. What does this mean for the Bezos’ divorce? Is it possible that MacKenzie could be left with nothing?
That scenario is not likely. Due to the fact that the Bezos’ live in Washington, a community property state, both spouses are probably going to receive 50 percent of all assets accumulated during the marriage. The news has also left many wondering how this division of property would work if the couple lived in Illinois. The question is a good one, as Illinois operates under very different rules.
Community Property States
Currently, only nine states in the country are community property states: Louisiana, Arizona, California, Texas, Idaho, Nevada, New Mexico, Wisconsin, and of course, Washington. In these states, any income, property, or other assets acquired during a marriage are considered community property. Upon divorce, each spouse will then receive 50 percent of those assets, in most cases. This means that even without a prenuptial agreement, MacKenzie and Jeff Bezos will likely each receive half of the income earned from Amazon during their marriage, in addition to half of the many real estate properties they own and any other financial assets....
Being free to move about the country is one of the rights and privileges enjoyed by all Americans, and being divorced does not necessarily remove this option from the table, even if child custody is shared. For relocations of a significant distance, Illinois law requires a legal process to be followed, ensuring that the rights of both parents are taken into account, and most importantly, the best interests of the child. Ignoring these requirements can lead to significant consequences, including modification of the custody arrangement in favor of the other parent, so working with an experienced family law attorney to ensure the applicable rules are followed is critical.
In one recent case, a drawn out custody fight that now straddles the court systems in Illinois and Massachusetts illustrates how dire the consequences can be for violating parental relocation laws. This case includes an allegation of unauthorized parental relocation as one of the issues both courts are being asked to sort out, and the Illinois court issued an arrest warrant for the father after he failed to attend six hearings related to the relocation. Fortunately, conflict does not have to escalate to this level, as long as parents meet their legal requirements when relocating.
What Is Considered Relocation?
Not every move will trigger the provisions regarding parental relocation, just those likely to interfere with the other parent’s ability to participate in the child’s life. Thus, when a parent in Illinois who holds the majority of the parenting time, or shares parenting time equally, wishes to move with the child, court approval is necessary, if one of the following is true:...
The divorce process involves multiple steps, even if the spouses are able to reach an agreement and execute a settlement on their own without the need for court intervention. However, if litigation ensues, and a trial is required to resolve any outstanding issues, the process can be especially involved. Typically, if a judge is asked to decide any legal issues between a divorcing couple, multiple requests for information and motions related to the claims each party is making will be filed, ultimately culminating in a trial, where the judge will hear arguments, accept evidence and render a judgment.
Even in uncontested divorces, attending multiple hearings is not uncommon before the final divorce judgment is issued, and this can be a nerve-racking experience, regardless of the level of mutual agreement. By contrast, if a couple’s divorce gets to the trial stage, this event can trigger a lot of stress and worry for each spouse. Emotions run high during divorce, and the thought of appearing before a judge to find out what the terms of the settlement will be is understandably overwhelming for both parties. However, as in all things, information is power, and having a basic understanding about how hearings and trials work during the divorce process can go a long way toward defusing some of the anxiety that these appearances provoke.
When Are Court Appearances Necessary?
How often and how extensive court appearances will be depends on the outstanding issues that must be resolved in a divorce case. Some appearances can be handled by a spouse’s attorney without his or her involvement, but other issues do require the attendance of both spouses before the court will enter an order. For example, if there are requests for temporary child support, alimony, and/or child custody arrangements while the case is pending, each spouse will be expected to appear in person....
Struggling to make ends meet puts a strain on the best of relationships, and if it lasts for a considerable period of time and/or is extreme, overcoming this challenge may prove more than a couple can bear. Marital assets and debts must be divided in divorce, and when finances start to break down, the ramifications can reach all the way to the possible loss of a home through foreclosure. Navigating the divorce process is hard enough in straightforward circumstances, but it can become quite complicated when an active foreclosure is being sought, because the mortgage lender has a legitimate interest in how this asset is divided. This situation may be further complicated if one spouse wants to attempt to save the home and assume sole possessory rights and ownership.
In an unusual case, an Illinois appeals court upheld a default judgment that terminated the interest of a divorcing couple’s mortgage lender in the marital home, which was in the middle of a foreclosure, because it failed to respond to a complaint by the husband challenging its validity. While uncommon, this case highlights how intertwined a divorce and a foreclosure can be.
Who Is Responsible for the Debt?
Financing the purchase of a home involves the legal assumption of the obligation to repay a promissory note, the contract that outlines how long and how much the buyer must pay to satisfy the loan. In addition, a lien is placed on the property, which gives the lender the right to repossess the property in the event of default. Most couples jointly sign these documents, making both spouses liable to meet the terms or face foreclosure....
A spouse’s reaction to the news of divorce can vary widely. The significance and repercussions of divorce often make it difficult for spouses to cooperate with each other, and some may even feel compelled to engage in actions designed to punish or hurt the other spouse. One form of revenge, or perhaps just simple disregard for the laws of marriage and divorce, involves one spouse wasting or destroying marital assets during the time surrounding the divorce, thereby depriving the other spouse of the ability to receive these assets in a property settlement.
The financial fallout of divorce is one of the most difficult consequences that couples must face, and both spouses may struggle to support themselves if the terms of the divorce are not properly structured. The division of marital property is a huge part of finding financial security following divorce, and if one spouse deliberately misuses marital assets, this can put the other spouse in financial jeopardy.
Property Division During Divorce
Illinois follows the equitable division of property model, meaning marital assets will be divided according to what is most fair. Most settlements are roughly equal, unless circumstances require a different outcome....
Getting divorced may be the right move for the health and happiness of both spouses, but financially, this decision can be devastating. The divorce process itself is expensive for many couples, and rearranging finances after years of sharing responsibility is no easy task. Making this transition is extremely difficult for all spouses, but those facing financial disadvantages are at risk of suffering irreparable fiscal damage by leaving the marriage. Spouses in this situation may have the option of asking for spousal maintenance (formerly known as alimony) from the other spouse if his or her financial means are more lucrative and stable.
Spouses who are returning to work after years or decades of absence will likely struggle to maintain an acceptable standard of living post-divorce, and decisions about spousal maintenance are frequently settled via negotiation or mediation. However, resolving this matter is about to get much more complicated and volatile, as a new tax law goes into effect on January 1, 2019, that will completely upend the treatment of spousal support. This change will greatly disincentivize a paying spouse from agreeing to this support, and it will greatly increase the likelihood of litigation to determine whether alimony will be required.
Paying spousal maintenance is a significant financial burden for most people. Under the current tax laws, a person may deduct alimony payments from their federal income taxes, thereby reducing the payor’s overall tax liability. The former spouse receiving spousal support is currently required to report this money as income....
In a perfect world, all children would live with both parents in a safe and loving home. However, this stable and supportive situation does not exist in all families, and children can end up splitting their time between parents, living solely with one parent, or being cared for by relatives.
Child custody, referred to as parental responsibilities under Illinois law, legally and traditionally rests solely with the parents. Parents are presumed to be fit, and efforts are made to keep children under their parents’ care. For a variety of reasons, however, parents are sometimes unable or unsuitable to take on this responsibility, and in these cases, a safe and stable alternative must be found that protects the best interests of the child. The road to achieve custody rights as a non-parent can be difficult, but not impossible.
Challenges to Custody
The biggest challenge any non-parent will face when seeking to assert custody rights is whether he or she has standing to bring the matter before the court. Standing refers to the petitioner’s ability to maintain a legal case. With non-parents, standing will only be found if the child is not in the physical custody of either parent (step-parents and grandparents do not necessarily need physical custody to gain standing if certain conditions are met). The person caring for the child must have obtained possession by consent, acknowledgment, or acquiescence of the parents, and the arrangement needs to be more than temporary....
Marriage naturally intertwines a couple’s social and financial lives, and these matters must be untangled in the event of divorce. This is no easy task, especially in light of equitable property division, a legal model that ensures both spouses receive a fair share of marital property following divorce. Under this standard, spouses can expect to divide marital assets in roughly equal measures, regardless of which spouse provided the resources to acquire the property in the first place.
While the contributions of both spouses need to be recognized in a divorce, a spouse who has substantial assets coming into a marriage or the potential to become a high-earner may have reasonable concerns about protecting his or her interests if the marriage does not work out. In these cases, a couple may choose to use a prenuptial agreement to address the resolution of financial issues in the event of divorce or another designated event, such as the death of a spouse.
Planning for the possible end of a marriage before it has even begun may appear pessimistic, but a prenuptial agreement serves an important purpose, and it can make the divorce process faster and simpler by sorting out complicated issues in advance. Importantly, this need is not limited to couples in a particular stage of life at the time of their marriage, as both younger and older couples can benefit from prenuptial contracts....
Deciding to take the final step to end a relationship is never an easy decision, but divorce can become much more complex when one spouse has issues with a psychological condition that compromises his or her capacity. Mental illnesses and cognitive conditions are challenging to recognize and adequately address, and staying in a marriage with a person experiencing these issues may not be advisable if issues of safety and emotional stability are an issue for either spouse.
Divorce requires making a number of significant and binding decisions, and the presence of mental illness or cognitive dysfunction can greatly alter how these decisions are handled, as well as how the impaired spouse may respond to divorce as a whole. The overarching influence of mental illness in some divorces is rarely discussed, primarily due to the stigma associated with mental illness in this country generally. However, mental health issues can take many forms, from alcohol abuse to bipolar disorder, and these issues can affect a relationship in a wide variety of ways. Mental illness will touch more couples than is generally recognized, and it can affect divorce proceedings in the following ways:
Grounds for Divorce
A number of states include a provision in the law that authorizes a divorce if mental incapacity of a spouse is established; however, Illinois is not one of them. Until 2016, Illinois retained a divorce system that was primarily fault-based, and one possible grounds for divorce was drug and alcohol addiction, conditions that are known to alter the abuser’s mental state at least temporarily, and sometimes permanently. Qualified no-fault divorce did exist, but it required lengthy separation and other requirements that could be burdensome to satisfy....
One of the primary challenges of being a single parent is finding the money to provide for all of a child’s needs. Divorce and separation can drastically change the financial means of the child’s primary caregiver, and the law expects that both parents will contribute to the financial support of the child until adulthood.
In the abstract, this ongoing obligation seems logically appropriate and fairly easy to arrange, assuming both parents can cooperate. In practice, however, parents may need to fight to establish and enforce child support, and they can face significant obstacles when child support orders are ignored by the other parent.
A recent article in the Chicago Sun-Times noted that there are millions of dollars in overdue child support owed to children living in Illinois. Unfortunately, the child is the person who most suffers when financial support is withheld, as well as the one who will most feel the burden of having less than what he or she really needs. The most effective and fastest route to receiving regular child support is to work with an experienced family law attorney who has the means and knowledge to ask the courts to take action designed to ensure compliance....
Responding to the changes brought on by divorce is no easy matter, as they encompass nearly every aspect of a person’s life. One’s finances are heavily impacted by this process, since the resources available to each spouse will be reduced after one household is split into two. The payment of child support and alimony are further expenses that can strain a person’s budget.
Taxes is one area that is less discussed but is still vitally important to achieving a fair property settlement and understanding how one’s financial picture will look for at least the next few years. Spouses should understand the tax consequences of divorce, including how taxes apply to the division of assets and debts, as well as their post-divorce income tax liability. This issue is of particular importance, as the window to take advantage of the current tax law that allows the payor to deduct alimony payments is closing at the end of 2018.
Because some tax repercussions do not appear immediately, the real economic implications of divorce agreements and associated court orders may not be felt until the divorce has been completed. Understanding these issues can help divorcing spouses avoid being blindsided by potential tax liabilities in the future....
Protecting a child from harm is the number one priority for parents. Rarely does this danger come from within a family, but when it does, a parent may be forced to make hard choices to ensure the child is properly protected.
Parents are presumed to have a fundamental right to spend time with and make decisions for their children, and this is reflected in the child custody laws that govern divorce cases in Illinois. As a result, in the vast majority of divorces, both parents will receive some amount of parenting time on a consistent basis. Unfortunately, this arrangement is not always appropriate, and in some cases, corrective action needs to be taken to ensure the child’s safety.
The normal way to address children’s safety involves requesting a modification of the family’s parenting plan, but this process takes time, and that is something a parent concerned about his/her child’s safety may not have. However, refusing to allow parenting time that has been allocated in a divorce decree is a direct violation of court order, and this can have serious consequences. Parents may wonder what to do if circumstances exist that would negate this rule for the child’s sake....
The common perception is that couples who are older and have weathered decades of ups and downs in their relationship will stay together forever. Of course, this is not always the case, and older couples do get divorced, even after 30 or more years of marriage. In fact, divorce among spouses over the age of 50 (known as “gray divorce”) has doubled since the 1990s, meaning more people approaching or in retirement must make major life changes.
Divorce between older couples may be more amicable, but different financial considerations come into play that need to be addressed. Regardless of the length of a marriage, spouses are required to divide marital assets and debts. However, older couples have less time to recover from the financial consequences of dividing everything by half, and they often have more complicated asset portfolios to distribute. Importantly, property division is rarely, if ever, revised by the courts after a divorce has been finalized, so getting it right the first time is crucial.
General Property Division Concerns
Illinois follows the equitable distribution model for property division in divorce that means marital property is divided according to what is fair, rather than strictly down the middle. Marital property includes anything acquired by either spouse during the marriage, as well as certain commingled marital and non-marital assets....
Deciding to file for divorce is never easy, and most spouses agonize over what the right choice is for themselves and their families. Ideally, when couples mutually agree that ending their marriage is appropriate, they can execute an uncontested divorce that takes much of the time, cost and uncertainty out of the legal process.
However, this best-case scenario does not always happen, and in fact, some spouses actively fight against the possibility of divorce. This stance can manifest as an unwillingness to participate in the case or a refusal to sign necessary documents. One example of the lengths some reluctant spouses will go to in hopes of stopping an impending divorce is found in the case of former Chicago Board of Trade Chairman Patrick Arbor, who fled the country to avoid paying a $18.3 million divorce settlement and said he was invested in finding another solution that did not involve ending the marriage.
While an unresponsive spouse is frustrating, this does not have to serve as a complete barrier to divorce....
Divorced parents rightly assume that their obligation to pay child support ends when the child reaches the age of 18 or graduates from high school. Financially supporting a child until he/she is legally able to engage in full time employment makes sense from a practical and legal perspective; however, many children go on to attend college and obtain a degree, causing them to incur the sky-high cost of a college education in America.
Unless a child receives a full scholarship that covers tuition, room, board, books and other expenses, the financial assistance of their parents is often necessary to help pay for their college education. Paying for college is a struggle for many parents, and divorced parents face the added pressure of juggling this cost while maintaining separate households.
While educational expenses for primary-level instruction are included in child support formulas, college expenses are not. If a parent wants to ensure that the other party helps cover the costs of a child’s college education, they will need to file a petition requesting contribution toward college expenses....
Divorce may be the best thing for a couple in the long-term, but in the short-term, it tends to release a stream of negative emotions, and bitter Court battles will likely increase the level of conflict. Divorce cases, particularly high-conflict ones, can greatly complicate settling outstanding issues, make it more difficult to move on emotionally and physically, and negatively impact a child’s relationship with one or both parents. While litigation is the traditional way to seek divorce, other options are available that are less confrontational and are designed to help couples find common ground, allowing them to resolve their disagreements privately and without Court intervention.
The newest divorce method endorsed by the Illinois legislature is the collaborative law process, and a law governing how it applies to divorce and family law cases went into effect at the beginning of 2018. This non-adversarial approach allows spouses to preserve a working relationship and implement better communication strategies that they can use going into future interactions after their divorce. The format and process of collaborative divorce is quite different than litigated divorce, and it can be a good option for couples seeking an alternative that promotes compromise when addressing how to resolve differences.
The Collaborative Process
Collaborative divorce is an alternative dispute resolution method that starts with both spouses and their attorneys signing a participation agreement in which they agree to make a good faith effort to settle their divorce without Court intervention and promise to freely share information. In addition, the parties must also recognize that if the collaborative process is terminated for any reason, their collaborative law attorneys will be disqualified from representing either client in future litigation....
Anyone who is currently paying alimony (legally referred to as spousal maintenance in Illinois) or considering this issue in the midst of divorce is likely aware that as of 2019, the tax rules for this obligation will change dramatically. Currently, the payor receives a deduction for this expense, and the recipient is required to report the payments they receive as taxable income. This arrangement relieves some of the financial burden this support can cause, which can serve to facilitate divorce settlement negotiations. However, under the recent federal tax reform laws, both the ability to deduct alimony and the need to report it as income will be eliminated for any divorce finalized on or after January 1, 2019.
Legal and financial analysts worry that this change will drastically increase the amount of conflict between spouses and greatly deter the payor spouse from agreeing to any type of ongoing spousal support. Recognizing the significant issues this change will introduce into the divorce process, Illinois lawmakers passed a new law this year that allows for adjustments to modification awards in hopes of making the transition under the new tax law easier. A discussion of the changes in Illinois alimony law will follow below.
New Baseline Spousal Maintenance Formula
Alimony is always a contentious issue in divorce, as the spouse asked to pay rarely has any desire to support an ex-partner once the relationship is severed. Further, unlike child support, which is the legal right a child holds until adulthood, alimony is essentially discretionary, and courts must determine if such support is appropriate before moving forward. To make this assessment, a long list of factors must be evaluated, and if the request is granted, the amount and duration of spousal support must be calculated....