Illinois residents who are beginning the process of divorce may be confused about what the process entails. One of the central components of a divorce is the property division process.
First, property must be divided between each spouse. This should result in an equitable distribution of the property so that each spouse walks away with a fair amount of assets. Inheritance, gifts and property owned prior to marriage are usually excluded from the marital estate. Because some assets will incur capital gains tax once they are sold, these assets may go to the spouse with a higher income while leaving the lower earning spouse with assets that have a lower tax level. While spouses are still legally married, they may continue to file jointly. However, if one spouse believes that this will leave him or her exposed if the other spouse does not pay his or her fair portion of taxes, he or she may wish to file separately.
A qualified domestic relations order may be issued in some cases so that retirement accounts can be split. This can help with the property division process, as well as to secure funds for child or spousal support. If the non-owing spouse becomes the recipient of his or her spouse’s benefit, the non-owing spouse will typically be able to treat the benefit in the same way as his or her spouse but he or she will not incur the typical early withdrawal penalty. A contentious matter between some spouses is who will get the marital home. In many cases, one spouse stays in the home while the other moves out. If both parties remain on the mortgage, a portion of the payment can be considered part of the alimony payment.
Individuals going through divorce may be able to negotiate a variety of terms of their divorce. In addition to reaching an agreement about the property division, they may also be able to negotiate who will pay the legal fees associated with severing the marriage.
Source: Nerd Wallet, “Divorce: Making Sense of the Confusion“, J. Kevin Stophel, June 03, 2014
