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Four Factors That Help Determine How to Divide Retirement Plans During DivorceFiguring out how to divide retirement benefits can complicate the division of property during your divorce. As with any marital properties, you must determine their value and how they fit into the equitable distribution of property. Will you divide the benefits between each other, or will you keep your own benefits? How much of your retirement benefits should your spouse receive? There are several factors that can help you answer these questions about your retirement plan:

  1. Type of Plan: There are generally two types of retirement plans that people receive through their work. Defined benefit plans, such as pensions, give employees a certain amount of benefits upon retirement, based on factors such as salary and years of service. Defined contribution plans, such as a 401(k), are based on employee contributions to the plan, which may also be supplemented by employer contributions. It can be more difficult to determine the current value of a pension than of a 401(k).
  2. Marriage Duration: Valuing a retirement plan as marital property is not as simple as figuring out its total current value. Only the amount that your retirement benefits increased in value during your marriage is marital property. Thus, the duration of your marriage will determine how much of your retirement plan is included in your marital property. Courts may also consider the duration of the marriage when deciding how equitable the division should be. The longer the marriage, the more equitable the division is likely to be.
  3. Individual Plans: When debating how to divide your retirement benefits, you should consider whether your spouse has their own benefits to support themselves in retirement and whether those benefits would allow them to maintain a reasonable standard of living. If your spouse has a retirement plan of similar value to yours, it may be simpler for each of you to keep your own retirement plans. If your retirement plan is more lucrative, you will likely be expected to share a portion of it.
  4. Planned Use: Spouses must determine when and how they will receive each other’s retirement benefits. You could plan to receive your share of the retirement benefits upon your retirement, delaying the payments until the time you need them. You could immediately receive your share of the retirement benefits without an early withdrawal fee. However, you would pay taxes on the money you withdrew unless you roll it over into your own retirement plan.

Contact a Naperville, Illinois, Divorce Lawyer

Dividing a retirement plan during your divorce is important for supporting yourself during the later years of your life. A DuPage County divorce attorney at Calabrese Associates, P.C., can assess the value of your retirement plan and negotiate an equitable distribution. To schedule a consultation, call 630-393-3111.

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What It Costs to Keep Your Marital Home During DivorceMany divorcees prioritize owning their marital home as part of their divorce agreement. There are advantages beyond an emotional attachment to your house. You may have invested money into making the home that you want. Finding a new home will take time and be costly. There is stability in continuing to live in the same home – for yourself and your children. However, it can be expensive to keep your house in your divorce agreement. Your spouse is a co-owner of the house, and you will need to buy them out in order to be the sole owner.

Assessments and Equity

Before you can negotiate what you will pay your spouse for the home, you first need to assess its value. How you determine this may depend on whether you are still paying off a mortgage on the house or you own it outright. You need a valuation of the house in both situations, including:

  • A property value assessment;
  • The estimated market value; and
  • The property’s condition and cost of repairs.

If you have a mortgage, you will need to determine your equity in the home by subtracting what you owe on the mortgage from the house’s value. You will pay your spouse their share of the home equity in exchange for keeping the home. Your spouse may present a different valuation of your house, based on their own assessment. If you cannot agree on the house’s value, you will need to take the issue to a court, which will choose the more accurate assessment value.

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Can a Divorce Court Order You To Sell Your Home?Deciding what to do with your marital home is one of the most important decisions you will make during your divorce. Will one of you keep the home or will you sell it and divide the proceeds? What is your home’s value? What properties will the other spouse receive if one of you keeps the home? Your divorce negotiations may stall if you cannot come to an agreement on answering these questions, forcing you to take the matter to trial. Among its options, the court can order you to sell your marital home if it decides that a sale is the only way to equitably divide the property.

Recent Case

In the Illinois case of In re Marriage of Hamilton, the wife in a divorce appealed a lower court decision that forced her to sell her marital home and rental home. The lower court ordered the sale of the homes because neither party presented their actual value. Without that information, selling the homes was the only way for the court to ensure that their value was divided equitably. The former wife cited four reasons why she believed the court erred in this decision:

  • Her former husband had testified to the estimated value of the homes;
  • She had presented tax assessment notices for the properties;
  • The marital home had sentimental value because it had belonged to her family for 90 years; and
  • Remaining in the marital home would have been in the best interest of their daughter.

The appellate court rejected these arguments and upheld the sale. Property valuations need to be current and based on proven facts. The husband did not cite how he reached the estimated values of the homes. The tax assessments were three years old and likely did not include inspections of the homes’ conditions. The sentimental value of the home can be part of a court’s decision but does not prevent it from ordering a sale if that is believed to be the best solution.

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Six Financial Clues That Your Spouse Plans to DivorceMany people who were surprised by their spouse’s divorce request will say that their spouse’s financial behavior should have warned them of the divorce. A spouse will start preparing once he or she has made an independent decision to divorce in order to gain an advantage in the division of property. Some behavior is an unintentional reaction when your spouse is considering divorce. Though not guaranteed signs of divorce, these changes in financial behavior often accompany a divorce:

  1. Your Spouse Is Not Depositing into Your Marital Account: Most spouses have a joint bank account that they use to pay for marital expenses. A spouse who is preparing for divorce may secretly open an individual account for use during and after the divorce. If your spouse suddenly stops depositing his or her income into your joint account, the money may be going to the individual account.
  2. Your Spouse Has Made Unexplained Withdrawals from Your Account: Sneaking money out of your marital account could mean several things. Your spouse may be putting that money into a private account, paying for a divorce attorney, or spending it on an extramarital affair. Your spouse may face legal consequences for essentially stealing your marital assets for personal gain.
  3. Your Spouse Wants to Track Your Spending: A spouse who is considering divorce may ask that you adhere to a tighter budget and give him or her a record of your recent expenditures. Your spouse’s hidden goal may be to gather financial data to prepare for your divorce.
  4. Your Spouse Encourages You to Take on Marital Debts: Some divorces occur shortly after a couple has entered a major loan agreement. Your spouse may have taken on the marital debt knowing that you would continue to share liability for it after your divorce.
  5. Your Spouse Complains About His or Her Income: Parties in a divorce downplay their individual assets and incomes in order to receive more marital property and avoid higher support payments. Your spouse may be trying to convince you that his or her earning potential has diminished or looks bleak in order to gain this advantage in your divorce. You must investigate whether these claims are true.
  6. Your Spouse Suddenly Showers You With Gifts: Giving you expensive gifts or taking you on a luxurious vacation seems to contradict the financial interests of someone who plans to divorce. However, your spouse may be feeling guilty about the pending divorce or trying to figure out whether these gifts can help save your marriage.

Contact a Warrenville Divorce Attorney

Once you know that your spouse wants a divorce, the responsible reaction is to consult your own lawyer. A DuPage County divorce attorney at Calabrese Associates, P.C., can help you financially prepare for a divorce. To schedule a consultation, call 630-393-3111.

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How Winning the Lottery Would Affect Your DivorceWinning the lottery is not something that you can plan for, but how you respond to winning is important if you are going through a divorce. You must first determine whether your spouse is entitled to a share of the winnings as part of the division of property in Illinois’ divorce laws. If your winnings are completely your property, your sudden influx of money will still affect how you settle your divorce. What you cannot do is hide the fact that you have won.

Property Status

Whether your lottery winnings are marital property in a divorce depends on when and how you purchased the ticket:

  • Your lottery winnings would most likely be marital property if you purchased the winning ticket before you started the divorce process. Your individual income is marital income during your marriage, and purchases made with marital income are marital property; and
  • Your winnings could be individual property if you purchased the ticket while separated from your spouse but before your divorce is completed. You would need to prove that you paid for the ticket with your individual income.

Illinois law states that spouses must equitably divide their marital properties during a divorce. Your spouse would not necessarily receive exactly half of your prize money. Instead, he or she would receive what the court believes is a fair share of the money, depending on the duration of your marriage and his or her financial situation.

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