Retirement assets grow in importance as marital property the longer you are married. If you divorce after several years of marriage, they could be one of the most valuable properties you own. As with all marital properties, you must include your retirement benefits as part of your division of property, and figuring out how to do so will be one of the most complicated parts of the divorce process. In general, there are four steps to determining how you will divide your retirement benefits as part of your divorce agreement:

1. Valuing Your Benefits: To start, you need to know the current value of your retirement benefits. Retirement accounts are classified as defined contribution plans and defined benefit plans. It is easier to determine the value of a defined contribution plan because it is an individual account that you are paying into. With a defined benefit plan, your retirement benefits are part of a group account that will pay you based on a formula, and estimating its value is based on your life expectancy and the account's interest rates.
2. Identifying the Marital Portion: Once you know the value of your retirement benefits, you must determine how much of it counts as marital property. The amount that your retirement benefits increased in value during your marriage is the amount that is marital property. Increases can come from your contributions to the plan, interest accrued on your holdings, and investments made with the money. The cut-off date determines when you stop counting increases in value towards your marital property. In Illinois, the date that a couple separates is usually the cut-off date.
3. Dividing the Benefits: Because Illinois is an equitable division state, you do not have to divide your marital retirement benefits evenly between each other. When a divorce court determines whether the division of retirement benefits is equitable, they will consider the duration of the marriage and the economic resources of each spouse. You may be able to keep all of your retirement benefits in exchange for other marital properties, such as your home.
4. Transferring Benefits: With many retirement plans, people are entitled to benefits based on being an employee or member of an organization. In order to receive benefits that you would not otherwise be entitled to, you will need a court order to transfer a portion of these benefits. A Qualified Domestic Relations Order is for private retirement benefits, such as a business’ retirement plan. A Qualified Illinois Domestic Relations Order is for retirement benefits provided by the Illinois state government. A Military Retired Benefit Division Order is for anyone who receives retirement pay because of their military service.

Contact a Kane County Divorce Lawyer

Dividing retirement benefits as part of your divorce may take the combined efforts of your divorce lawyer and a financial professional, such as an actuary. A St. Charles, Illinois, divorce attorney at Goostree Law Group will determine how to include your retirement benefits as part of your divorce while still protecting them. Schedule a free consultation by calling 630-584-4800.

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Student loans are among the largest debts that many Americans have and can be difficult to get rid of. Even bankruptcy is unlikely to discharge your student loans. When you are married, your spouse can help you keep up with your bills or even cosign on your student loan agreement. However, what happens to your student loan debts during your divorce? In Illinois, divorcing spouses equitably divide their marital debts. There are five important questions that determine whether student loan debts qualify as marital debts and how they will be divided during your divorce:

1. When Were the Student Loan Debts Created?: The primary difference between marital and nonmarital debts is whether you entered the debt while you were married. If you took out a student loan while you were married, you will likely classify it as a marital debt. If your student loans originated before your marriage, they are likely a nonmarital debt that you are solely responsible for. 
2. Whose Name Is on the Contract?: From the creditor’s perspective, the people responsible for your student loans are the ones whose names are on the student loan agreement. The creditor may require your spouse to cosign on the agreement if you take out a student loan or refinance a premarital student loan agreement while married. If your spouse’s name is not on the agreement, you can negotiate for them to help repay your student loans as part of your divorce, but the creditor will hold you responsible if your spouse does not follow through.
3. What Does Your Prenup Say?: A prenuptial or postnuptial agreement can decide how you will divide debts during divorce, including your student loans. If you have a prenuptial agreement, it may state that you will be solely responsible for your own student loan debts or that your spouse will help pay your nonmarital student loans.
4. Do You Both Have Student Loans?: An equitable division of debt means it must be fair given the circumstances and not necessarily equal. If you both incurred student loan debts of similar value during your marriage, you can agree to each be responsible for your own student loans.
5. How Was the Money Used?: It may also be equitable for a spouse to be responsible for their own student loans if all of the money went towards paying for their education and benefiting their career. However, spouses sometimes use student loan money to pay for marital expenses, which may mean it is fair for both spouses to share the debt.

Contact a Kane County Divorce Attorney

Your marital debts are part of a larger financial picture in your divorce, including how you will divide your marital properties. A St. Charles, Illinois, divorce lawyer at Goostree Law Group can help you create a strategy for financial success in your divorce. Schedule a free consultation by calling 630-584-4800.

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Many divorcing couples conclude that selling their house is the best way to handle their marital home. It is difficult to equitably divide their marital properties when one spouse keeps the house, and the cost of owning the home may be too great for one person on their own. By selling the home instead, they can divide the money they receive in the sale and use it towards expenses, such as buying or renting a new home. If you have sold your home before, you understand that it takes a great effort to prepare your home for sale and find a buyer. Unfortunately, your divorce is taking up much of the energy that you might normally devote to the sale. There are several actions that you can take to help with the sale process:

1. Keep the House Occupied: It is natural for one of you to move out of the house once the divorce process has started. The other spouse should continue living in the house until the sale is finalized, even if they would prefer to move into their new home before then. It is more difficult to sell a house that is empty of people or possessions. Paying to stage furniture and appliances in the house is an extra expense and still less attractive to buyers than you living in the house.
2. Fill in Empty Spaces: When one spouse removes their possessions from the house, it can leave unattractive empty spaces in rooms. You should spread out your remaining possessions to fill in those spaces and give the house a more balanced look.
3. Invest in Maintenance: You do not want home maintenance issues to decrease the sale value of your house. You need to assess your home for necessary repairs and try to fix the issues before you put the house on the market. Because you will both be profiting from the sale, it is reasonable to share the maintenance costs with your spouse.
4. Find a Divorce-Experienced Seller: When selling your home and divorcing at the same time, you need a real estate agent to manage the sale while also understanding how the divorce changes the process. Divorcing couples are different than other co-owners because they are under additional stress and often not communicating with each other. The agent may need to take on more responsibility in the sale process and make sure both spouses feel like their needs are being met.

Contact a St. Charles Divorce Attorney

Your house may be the most valuable and complicated property you will have to include in your divorce agreement. A Kane County divorce lawyer at Goostree Law Group has experience with all manner of house-related issues in a divorce. To schedule a free consultation, call 630-584-4800.

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Most properties that you obtain during your marriage are classified as marital properties in the event of a divorce, such as items you have purchased and the income you have earned. Gifts and inheritances are the exceptions to this rule. Inheritances are assets given to you through an estate planning document, such as a trust or will, or after the probate process. Even if you inherit an asset while you are married, it is usually a nonmarital property as long as you can prove that the person who gave it to you intended for you to be the sole owner of the property. However, your decision on what to do with a property after you inherit it can make it marital property.

Commingling and Transmuting

An inherited property can become marital property if you commingle it with other marital properties or involve your spouse in its ownership or management. For instance:

• Inherited money becomes marital property if you put it into a joint account with other marital money; or
• Inherited real estate becomes marital property if you refinance the property and your spouse cosigns on the agreement.

In these situations, your inherited properties are either transmuted into marital properties through your actions or become indistinguishable from your martial properties because they are commingled. As marital property, your inheritance could be divided between you and your divorcing spouse or given to you in exchange for other marital properties. As nonmarital property, your inheritance would not count towards the equitable division of property.

Doctors as a profession are statistically less likely to be involved in a divorce. They have demanding workloads that can strain a marriage, but a successful doctor is often financially stable, which helps a marriage. When a doctor does divorce, their practice is part of the division of marital properties. Valuing a professional practice is different than other businesses and requires financial professionals who are familiar with these practices.

Practice as Property

Your medical practice is marital property if you started it after your marriage. If your practice predates your marriage, you must include its increase in value since your marriage as part of your marital property. Unlike with other types of businesses, your spouse does not have the option of owning part of your practice unless they are also a doctor in the same practice. This static ownership means that you will need to compensate your spouse with other marital properties. Your student debt from medical school is marital debt if it was accrued during your marriage. You may be able to offer to assume sole responsibility for the debt as compensation for your medical practice.

Valuing a Practice

A medical practice shares many of the factors used in determining the value of other businesses, such as revenues, physical assets, and growth potential. Two factors of particular concern when valuing a medical practice are: