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Libertyville Divorce Blog

High-asset divorce brings dispute over artwork

Two wealthy art collectors are in the process of contentious divorce proceedings. The property in this divorce will be split according to equitable distribution, which is the same law that governs property division in Illinois divorces. In addition to millions of dollars of artwork, the New York couple is battling over real estate in Manhattan and the Hamptons. There is a good chance that private details about how the husbands runs his business will be exposed in these proceedings, which could also be costly.

One consideration in dividing artwork fairly is whether the artwork was part of the couple's personal belongings or whether it was the property of a business. If it is the latter, the judge will need to determine how much each spouse contributed to the business in order to assess what property interest they each have in the artwork. To assist in the valuation process, the judge may order an appraiser to valuate the artwork.

Collaborative divorce may be a better option than litigation

Divorce is a difficult experience often made tougher by a contentious courtroom battle, but marriage does not have to end this way.

You have options, one of which is collaborative divorce. This is a process gaining in popularity because of its focus on a reasonable, practical method for closing one chapter of your life and opening another.

More older Americans choosing to divorce

Even as overall divorce rates decline in the United States, "gray divorce" is growing more common in Illinois and across the country. For Americans aged 50 and up, the divorce rate has more than doubled in the 20 years between 1990 and 2010, a trend that shows no sign of stopping. There are a number of reasons why more older Americans are choosing to end their marriages, but there are also some specific concerns that can accompany this type of separation. Because a divorce tends to have a major financial impact on both parties, people considering a divorce later in life may want to consider their retirement plans.

One contributing factor to the rising popularity of divorce among older adults is increased health and lifespan. People are living longer lives and remaining healthy longer, and they want to live out their lives happily. In addition, some parents stay together in order to raise their children in the same home. After their children are adults and out of the home, they may finally make the decision to divorce. Social responses to divorce have also changed dramatically in recent decades; ending a marriage has become much more widely acceptable and common than in the past.

Social Security benefits after a divorce

Older Illinois couples who are planning on getting divorced might be concerned on the effect the split will have on their retirement finances. One of the benefits many older people depend on to help them cover living expenses is Social Security and in a divorce, they might worry that they will lose some of these benefits. Many people, however, will be able to still receive Social Security benefits based on their ex-spouse's work record if they meet the eligibility criteria.

To be eligible to claim and receive benefits based on their ex-spouse's work record, the couple must have been married for at least 10 years. The person receiving the benefits on their ex's work record must be at least 62 and unmarried, even if their ex-spouse has remarried. Additionally, the amount the person receives using their ex-spouse's work record must be greater than the amount they would receive based on their own work record, and the ex-spouse must be collecting benefits. One exception is for couples who have been divorced for more than two years and their ex has reached full retirement age but is just not claiming their benefits yet.

Why taking money from a 401(k) may not be the best idea

It isn't uncommon for Illinois residents and others to turn to their IRAs or 401(k) balances to help pay for costs related to their divorces. However, individuals may be diluting the value of their accounts by accessing them before the age of 59½. This is because the government will assess a 10% early withdrawal fee for doing so. Furthermore, those who take money out of their retirement accounts will need to pay income taxes on the amount withdrawn.

Instead of withdrawing money from a 401(k), it may be possible to borrow money instead. Individuals may be entitled to borrow an amount equivalent to 50% of their current account balance up to $50,000. Loans are typically repaid on a monthly schedule, and interest rates are typically the prime rate plus 1%. A person usually has five years to repay the entire loan balance.

Why it is important to understand marital finances in a divorce

People in Illinois who are going through a divorce may be surprised to learn that their spouse has debt or assets they did not know about. According to a study by Fidelity Investments, 10% of participants found out during the divorce that a spouse had hidden assets, and 14% found out about debt.

One way to prevent this is to remain an active participant in financial decisions within the marriage even if the other spouse mainly handles the money. The Fidelity study found that people who did not know much about the marital finances took the longest time to recover financially. They also tended to regret not being more involved in the joint finances. Both spouses should have an idea about what is in their retirement accounts and tax returns, and they should have a voice in major financial decisions.

3 important benefits of divorce mediation

Do you think that there is no way to avoid spending a fortune on your divorce? Feel as if you have no other option than to fight your ex tooth and nail over every lamp or area rug? Think again. These days, some former couples making their way through divorce find that they can do all the things that they need to do to move forward with their separate lives without having to go through litigation.

Instead, many former couples opt for divorce mediation, which involves both parties coming together with an unbiased third party to work through matters to end the marriage. While mediation may not work in all circumstances, if your split is at least relatively amicable, it may serve you both well to consider it. Why? Compared with a courtroom divorce, divorce mediation offers several notable benefits, such as:

How a postnuptial agreement could protect a couple's assets

Lots of Illinois residents are familiar with how a prenuptial agreement works. It is a legal document that's designed to protect a person's assets in case they divorce in the future. Not everyone, however, is familiar with a postnuptial agreement.

A postnuptial agreement shares some similarities with a prenuptial agreement. However, the "post" version is signed by each partner during the marriage. It will protect the assets of each individual in case they separate or divorce in the future.

How divorce impacts older people financially

Since 1990, the divorce rate for couples 50 and older has doubled. Divorces can have both a financial and emotional impact on Illinois residents and others who go through them. Research has shown that those who have ended their marriage may be at a greater risk of higher blood pressure or excessive weight gain. Individuals who get a divorce later in life can see a decline in both their net worth and their standard of living.

Those who get divorced after the age of 50 will see their net worth drop by about 50%. Women will see their standard of living decrease by 45% while men will see their standard of living drop by 21%. Furthermore, most who get divorced later in life don't see any type of financial improvement in the years following the end of their marriages. For women, this is partially because it can be harder to find a job after spending years raising a child.

Negotiate your way to an amicable divorce settlement

Coming to terms with the very fact of divorce is enough stress to handle. You may find the prospect of facing a tough courtroom battle wholly intimidating.

Negotiation is an option to consider. There are a number of benefits, starting with the location: You and your spouse can work toward an amicable divorce settlement away from the courtroom.

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