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Libertyville Divorce Blog

Keeping the marital home after a divorce

Individuals who are going through divorce in Illinois may need to decide if they want to keep the marital home after the divorce is finalized. The spouse who keeps the home usually pays the other spouse their half of the equity and assumes the mortgage debt. There are several important factors to weigh when deciding whether or not to keep the home after a divorce.

It is important to keep in mind that when one spouse signs a quitclaim deed granting the other the rights to the marital home, the underlying legal obligations on the loan are still in effect because the names of both parties are on the contract. If the spouse who is keeping the home after divorce fails to make payments, this could affect the other spouse's credit.

How to avoid common financial errors in a divorce

There are several financial mistakes that people in Illinois should be sure to avoid during a divorce. For example, they should not spend on big-ticket items during the split. The bills for this behavior can add up quickly.

Another mistake is selling assets in order to pay bills. What people who do this may be unprepared for is the hefty tax burden that could accompany such sales. Another area in which people should be mindful of taxes is with 401(k)s. Making distributions from a 401(k) during divorce without a document called a qualified domestic relations order and an IRA to roll the distribution into will result in taxes and penalties on the distribution.

Study raises questions about the cohabitation effect

Researchers have long held that marriages are less likely to end in divorce when couples live together before walking down the aisle. However, a study published in the Journal of Marriage and Family's September 2018 issue suggests that what is known as the cohabitation effect may be extremely short-lived. Experts believe that couples who live together happily before getting married will find married life far less disrupting, but researchers from Stanford University discovered that this was only true for the first year of marriage.

The researchers criticized earlier studies into the cohabitiation effect for looking solely at the short-term consequences of living together before marriage. To provide a long-term perspective and a deeper understanding of the issue, data on American women gathered between 1970 and 2015 by the National Surveys of Family Growth was used for the latest study.

Practical approaches to prenuptial agreements

Prenuptial agreements might not qualify as romantic, but engaged couples in Illinois have much to gain by defining the terms of a hypothetical divorce. These contracts allow people to establish how marital assets and debts will be divided in case the marriage ends. By negotiating the terms during a happy point in the relationship, people might avoid making emotional decisions when under stress in the future.

These agreements are not just appropriate for the wealthy. People of any income level have an interest in preventing prolonged disputes over money or even pets if a relationship goes sour. The law also generally protects people from contracts that include unreasonable terms such as prohibiting weight gain or ruling out the possibility of paying child support.

How to prepare financially for divorce

It costs a lot of money to go through a divorce. Illinois is actually one of the more expensive states in the country to divorce, with the average divorce filing fee being $289. That does not even take into account the attorney's fees.

To prepare for this, you need to plan your finances accordingly. While you should seek an uncontested, amicable divorce when possible, there is the likelihood of having a contested divorce. Either way, the following actions can help you get your finances in order before pursuing divorce in earnest. 

How having more money could increase divorce risk

Illinois couples who are wealthy might be more likely to get a divorce than those who have less money. Furthermore, the American Academy of Matrimonial Lawyers reports that divorce rates increase during times of economic surges and decrease during economic declines. Faced with the financial costs of divorce, some couples decide to stick it out.

Money is often a source of conflict between couples as well. In a survey conducted by SunTrust Bank, 35 percent of people said finances were a major issue in their relationship. The Federal Reserve Board has reported that couples with disparate credit scores are more vulnerable to divorce than those who have similar scores. People with higher credit scores are likelier to stay in a relationship.

Keep the details of divorce off social media

Social media has played an active role in destroying people's marriages over the last few years. Many attorneys have noticed a trend of people using Facebook to engage in extramarital relationships. Social media can continue to do harm during the divorce process if spouses do not know how to use it responsibly. 

Overusing social media is not good for your emotional health, and divorce is already a difficult time. You do not want to make it more difficult by using Facebook, Instagram and Twitter in unhealthy ways. 

New tax laws could make cost of divorce increase

People in Illinois who are getting a divorce and who anticipate giving or receiving alimony payments might want to try to complete their divorce before the end of 2018. Starting in 2019, alimony will no longer be tax-payable or tax-deductible, and experts say it is likely this will not benefit either the payer or the recipient.

This change was part of the Tax Cuts and Jobs Act that was passed at the end of 2017. Unlike other parts of the act, it is not supposed to sunset after 2025 although it is not clear what Congress may decide regarding alimony. Couples may want to include a provision in their divorce agreement that allows for flexibility regarding alimony in case the law is changed again.

Study looks at relationship between job and divorce

Librarians and farmers might be less likely to divorce than people who are in other professions. This was one of the findings of researchers at Stockholm University who examined Danish data for the relationship between work and divorce. The professions that had the highest divorce rate were in the hotel and restaurant industry.

The study, which looked at people in opposite-sex marriages, also found that people who worked in professions that were dominated by people of the opposite sex were more likely to get a divorce. However, the divorce rate was lower for women in male-dominated professions than for men in female-dominated professions. Researchers controlled for risk factors such as whether the couple had children and how long the marriage had lasted but said further research was needed to determine why the rate for men was higher. For example, men working in female-dominated professions might make less money, and this could add a strain that contributed to divorce.

Health and stress effects of divorce after 50

The Holmes-Rahe Stress Inventory is a metric designed to predict which events in life are the most stressful and the most likely to result in a health breakdown. The number two stressor on the inventory is legal uncoupling or divorce. For people in Illinois who are divorcing after age 50, it may be even harder on the health.

Since 1990, divorce rates have doubled for people at least 50 years old. According to a geriatric psychiatrist and clinical psychiatry professor, divorce can have a number of different physical and psychological consequences, especially if the person going through divorce has medical problems already. The spike in the number of older age divorces has been referred to as gray divorce.

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