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division of assets, kane county divorce lawyerAmong the many concerns spouses have throughout the divorce process, it is no surprise that a significant anxiety that often plagues those undergoing a split is worry over finances. Depending on your income, earning potential, employment situation, and the belongings you and your spouse have acquired over the course of your marriage, that worry may be severely compounded when children are added to the equation or when there is a drastic difference in your debt to income ratio.

Plan Ahead When Possible

Whatever your financial circumstances as you work through the end of your marriage, you will need to come to grips with your situation sooner, rather than later. It is imperative to obtain a snapshot of your finances in order to work with your attorney, financial planner, and accountant to plan for and create financial security for yourself following the divorce. Doing so requires a full inventory sweep of your financial obligations and assets.

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Kane County divorce attorneyDepending on the position you hold, you might have a pension plan. A pension is a fund that a working individual contributes to during his career, which is then invested by the manager of the pension in an effort to have the fund earn money. The intent is to put the worker in a position to retire comfortably. When the worker retires, he or she receives a monthly payment from his or her pension. Many Americans rely on multiple retirement accounts, which can include IRAs, 401(k)s, 403(b)s, and health savings accounts as well as pensions to save money for retirement. In a divorce, retirement accounts are treated the same way as all other assets – subject to division according to the doctrine of equitable distribution. This is true even if you opened your retirement accounts before you were married because you continued to contribute to them during the marriage.

Your accounts may be divided into “marital property” and “singly-held property” portions by determining how much money they contained before you were married to determine how much money may be considered to be part of your marital estate. Before you enter the property division process, talk to your lawyer about how your pension will be valued so it can be distributed in an equitable manner.

Valuing Your Pension

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Posted on in Divorce

With a few exceptions, all assets acquired during an Illinois marriage are considered marital property.  Most people may be aware that marital property can include significant assets such as a home pension plans, stocks and bonds. However, many people may not be aware that rewards points like frequent flyer miles, hotel points, and other similar points earned during the marriage may also be considered marital assets.  If the rewards points, or a portion of the points, were earned before the marriage, then the points are considered non-marital assets and are not subject to be divided upon divorce.

  Division of Rewards Points by the Divorcing Parties One way for the divorcing parties to divide the reward points would be to contact the airline, credit card company, or hotel and have them divide the points into two separate accounts.  This way, each spouse can take their separate account and use its reward points independent of the other spouse.  If the assets are frequent flyer miles, any transfer fees that an airline might charge should be considered in any divorce settlement agreement. Other issues that should be considered include some rewards programs’ prohibition on the transfer of points, even if the transfer is stated in a divorce decree; the potential expiration of reward points; and any possible fees associated with renewing the points. If the rewards program prohibits division of the points, then one spouse could agree to maintain the points and distribute half of the points to the other spouse upon request.  For example, after the divorce, the spouse who possesses the points would be responsible for booking a flight or hotel room for the ex-spouse.  The divorcing parties could also agree to reserve the rewards points for children or other family members to use.  Division of Rewards Points by the Court If you and your ex-spouse cannot decide on how to divide your property upon divorce, the court will determine what marital property is and how much that property is worth. If an airline, credit card company, or hotel places an actual cash value on the points, then the court’s calculation is straightforward.  Conversely, if rewards program does not assign an actual cash value to the points, it can be difficult for the court to compute a value for frequent flyer miles, hotel points, or other rewards points for the division of marital property. Reward points can vary in value depending on which flight or hotel property you wish to use, and what time of year or day you wish to use the points. Additionally, airlines, credit card companies, and hotels may be unclear regarding the actual value of the points, which can make it difficult for a court to award cash, or a spouse to offer cash to buy out the other’s spouse’s interest in the reward points.  Assistance with a Claim for Division of Marital Property It is not always easy to decide how to fairly divide reward points and other assets and debts of divorcing parties.  If you believe your spouse might have rewards points that could be marital assets, Goostree Law Group, P.C., can help you decide your best settlement options to divide the reward points and other assets equitably.  Contact our experienced Kane County family law attorneys today to see how we can help.
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