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Kane County divorce lawyerUnder Illinois law, an employee who gets hurt on the job is usually eligible for benefits under the state’s workers’ compensation program. These benefits are intended to help both the worker and his or her family. But, what happens when a person who is receiving workers’ compensation benefits gets divorced? If you are in such a situation, the answer to this question could have a substantial effect on your divorce.

Are Benefits a Marital Asset?

You probably realize that workers’ compensation benefits are considered a type of asset. The question, however, is whether they are considered part of the marital estate or not. In general, if the accident that made you eligible for workers’ compensation benefits occurred during your marriage, the benefits are likely to be considered marital property. This may even be the case if your divorce was already in process at the time of your accident. On the other hand, if the accident occurred before your marriage or after a judgment of legal separation was entered, the benefits you have received are not as likely to be considered as property of the marital estate.

Workers’ compensation benefits can be paid out in a single lump sum or in a series of payments over time. Regardless of how you are receiving your benefits, if they are determined to be marital property, your spouse could be entitled to an equitable share of them in your divorce. Your spouse will not automatically get half, however, because Illinois is an “equitable distribution” state. This means that the court will allocate the marital property between you and your spouse in a manner that is fair and just, not necessarily equal. The law requires the court to consider many different factors when deciding on what is fair.

St. Charles IL divorce attorneyDivorce is an emotionally and financially complex process that affects around 800,000 Americans each year. Sadly, some studies estimate that a person’s net worth could be reduced by as much as 77 percent by the time their divorce decree is finalized. The good news is that this is not always the case. In fact, those who plan and prepare effectively for divorce often fare better than those who do not.

Start by Taking an Honest Look at Your Debt

You may have heard about how important it is to account for all of your assets before your divorce. This is true, of course, but it is often just as important to carefully examine your debt. After all, debt is not going to simply disappear once the divorce is over. Instead, any debt belonging to the marital estate will be distributed between you and your spouse, much like your assets will be. However, there are often additional complexities when it comes to dividing debt. For example, mortgages and other large debts may not be as easy to “split” because the lender or extender of credit may not be willing or able to remove one of you from the account.

At first glance, this might not appear to be much of an issue, but it can be problematic. For example, if you attempt to obtain a new line of credit, such as while trying to buy a car or a new residence once the divorce is over, you may have a hard time managing your debt-to-income ratio. Alternatively, if your spouse is considered “responsible” for the debt in the divorce but your name remains on it, your credit could also take a hit if they ever default on payments.

St. Charles property division lawyerMost of the decisions you make during your divorce can and probably will affect you for the rest of your life, but one of the most important decisions you and your spouse must come to is how you will divide your marital estate. For many couples, this can be an emotional and highly contentious process because of the importance placed on their belongings and the need to have financial security after the divorce process has been completed. The way marital property is divided can affect a person’s financial stability or even their ability to retire later in life. With so much at stake, Illinois courts urge couples to try to come to an agreement on their own about property division, though, if they cannot, they will have to take the issue to court.

Factors for Consideration

If a couple is unable to reach an agreement about how their marital estate will be divided, they will have to appear before a judge so that he or she can make a determination for them. If this happens, the judge will only make decisions about marital property, which means most property that was acquired after the couple was legally married but before a judgment of legal separation was entered. The judge will consider a variety of factors, including:

What Should We Do With Our Family Home During Our Divorce?If you are one of the lucky people who get to live out the American dream by buying and owning your own home, you know how rewarding it can be to have a place of your own. When you are married, real estate property becomes more than a house – it becomes a home. Dealing with your family home can be one of the toughest decisions you will make when dividing your property during your divorce. In many cases, the family home is the most valuable asset a couple owns, both from a financial and sentimental perspective.

Generally, three basic options exist when it comes to dealing with your marital home. You and your spouse can choose to sell the home, one of you can keep the home, or you can both keep the home. Each family situation is unique, so what may be right for one family may not necessarily be right for another. 

Sell the House

The easiest way to deal with your family home is often just to sell it. If you and your spouse both agree to sell the home, you can take the equity you have in the home and split it, leaving each of you with part of the profits. The downside to selling your home is that you may owe capital gains taxes on the home if it has appreciated in value. If your home has depreciated in value, you might want to consider a different option.

Will I Get to Keep My Retirement Savings in My Illinois Divorce?Under Illinois law, virtually any property that either spouse acquires during a marriage is considered marital property, which means that it is subject to being divided between the spouses if they ever get divorced. Such property usually includes wages from your job, even if the money was invested or deposited in a retirement account established in just one spouse’s name. This is also true for a vested pension plan because the value of a pension is based on the efforts of the working spouse, which, according to Illinois law, makes an asset part of the marital estate.

How Much of Your Savings Is Marital Property?

It is not uncommon for a working person to put away savings for retirement over the course of many years. As such, your retirement savings, including any funds in an Individual Retirement Account (IRA) or 401(k), may have started well before you even considered getting married. Any contributions that you made — as well as the increase in the value of your savings — before your marriage are considered non-marital property and are not subject to division. Contributions and value increases that occurred while you were married, however, are marital property, which means that they must be taken into consideration in the asset division process.

As your divorce proceedings get underway, it is a good idea for you and your lawyer to discuss your retirement savings with a qualified financial professional with experience in this type of matter. He or she can help you determine the marital and non-marital portions of your retirement savings, along with an accurate valuation of each portion. Depending on the situation, it might be possible for you to keep the full balance of your retirement savings, but to do so, you will need to offset their value by giving other assets to your soon-to-be ex-spouse.

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