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Libertyville Divorce Blog

Things to keep in mind when dividing a retirement account

Couples in Illinois who need to divide a 401(k) or company pension plan will need to use a document known as a qualified domestic relations order. Otherwise, they may have to pay high taxes and early withdrawal penalties. A QDRO should be prepared by an attorney in consultation with the plan administrator.

It is important for the QDRO and divorce agreement to be consistent. To that end, the order should specify how distributions will be made. While most people prefer to roll distributions into a retirement account, they can also take a direct distribution. A divorce is considered an exception to the restriction on taking distributions before the age of 59 1/2 without incurring a penalty. However, people will still owe regular income tax on whatever they receive.

Steps for financial protection in case of divorce

The possibility of divorce may not be the first thing on the minds of couples in Illinois who are getting married, but it might be a good idea to prepare financially all the same. For people who worry that this indicates a cynical view of marriage, one financial expert points out that it is not very different from the precautionary step of putting on a seat belt when getting into a car.

A couple who has not yet married can draw up a prenuptial agreement that addresses which assets and debts they would like to keep separate and what they want to happen to shared assets if they divorce. A married couple can do something similar with a postnuptial agreement. Another step a couple may want to take before marriage is having any assets that are difficult to appraise, such as a business, valuated.

Litigation may not be right for your situation

The process of divorce is ugly. It can turn what was once love into hate and make you reconsider ever getting married again. Ideally, when pledging “for better or for worse” to your partner, you probably envisioned growing old together instead of being embroiled in a bitter battle over which piece of furniture belongs to whom.

Amicable divorce

How to avoid financial ruin after a divorce

Divorce at any age can be difficult from a financial and emotional perspective. However, there may be unique challenges that Illinois residents or others face if they get divorced later in life. For instance, an individual who may be entitled to alimony may need to find ways to protect that source of income. This may be done by asking to receive a lump sum as opposed to monthly payments.

Doing so may prevent the loss of funds in the event a former spouse dies or loses his or her job. In a divorce, joint property is generally handled differently than separate property. Taking an inventory of assets may help a person determine what he or she may keep after the marriage ends. This may be especially important if assets, such as an inheritance, may have been commingled during a marriage. As a general rule, inheritances received are considered separate property.

Business valuation can be key in divorce settlements

The financial aspects of a divorce can be some of the most challenging and troublesome parts for Illinois couples, especially when the marital assets are complex. In many cases, a family business may be the most valuable property in the marital estate and a settlement based on its value could be essential to the resolution of the divorce. When dividing such an asset, there can be a number of questions to resolve, including the proper valuation of the business, dealing with its value in relation to spousal support and other assets and ensuring proper reporting of income related to the business.

Discovery in a divorce that involves complex assets must first prioritize establishing a value for the business. This can take the form of several different approaches, including the market, asset and income types of valuation. In each of these cases, studying the financial statements of the business is essential to establishing a correct valuation. Further discovery can also be important, especially when one spouse is less familiar with the ongoing financial aspects of the company. This can include interviews with management and site visits.

Why people should not try to get revenge during divorces

When Illinois couples decide to end their marriages, some want to use their divorces as a way to get revenge against their estranged spouses. People should never seek to get revenge through the divorce process because doing so is likely to make the situation much worse.

People who share children with their estranged spouses should focus on their children's needs and interests and remember that getting revenge only hurts the children. Children should never be subjected to listening to all of the marital wrongs that their parents have suffered. All this does is cause emotional harm to them.

Issues for people who divorce in their 20s

Studies show that the divorce rate has fallen among adults between the age of 25 and 39, and a large reason for this is the later age at which people are marrying for the first time. However, this also means that Illinois couples who end their marriage in their 20s may feel isolated from their peers, most of whom are not divorced and many of whom may not even have married yet.

Despite this, in some ways, divorce may be less difficult for people in their 20s. They may be less likely to have children or to have started acquiring valuable assets. It is also less likely that there will be a significant difference in income. Millennials may also be more likely to have a prenuptial agreement.

What people get wrong about being married

Illinois residents may have been told what marriage is supposed to be like. One of the common stories surrounding marriage is that it results in a lack of sex or intimacy in generally. The truth is that a couple can make their relationship into anything that they want it to be. This means that sex and intimacy may not necessarily go away just because a couple has walked down the aisle.

It may also be thought by many that marriages only work when they are equal. However, there are generally times when one person takes on a larger workload than the other. Of course, both partners will generally be tasked with carrying a larger load at one time or another. Those who expect their marriages to be completely equal may find that their relationships aren't healthy at all.

The rise of the good divorce

We’ve all read of the bitter fighting that is often associated with divorce litigation. Two spouses, backed by two pit bull divorce lawyers, throwing accusations at each other. Neither spouse willing to give an inch, both determined to win.

Divorce isn’t about winning.

How to divide a startup in a divorce

Illinois residents who have an entrepreneurial spirit may be less likely to succeed in their marriages. One of the reasons why this may be the case is because those who start their own businesses are under intense pressure on a regular basis. However, even a person who creates the next Uber may not survive the rigors of marriage.

As with any other asset, the value of a startup company may need to be divided at the time of a divorce. In some cases, this could mean hundreds of millions of dollars are at stake. Creating a prenuptial agreement may help those who are successful in business to protect their wealth. Of course, an individual needs to first know about prenuptial agreements to take advantage of them.

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