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Structured Settlements Defer Compensation for Marital Properties

Posted on in Division of Assets

Structured Settlements Defer Compensation for Marital PropertyMarital properties in a divorce must be equitably divided between the two parties, according to Illinois law. However, cleanly dividing the properties can be challenging or, in some cases, seemingly impossible. Properties can differ based on their assessed value and liquidity. Some of the most valued properties in a marriage, such as real estate, are not liquid, unless the parties agree to sell the property and split the proceeds. For instance, only one spouse can receive the marital home, and the other spouse must be compensated for the assessed value of the home. If a non-liquid asset is by far the most valuable property in a marriage, the remaining properties may be insufficient in value to serve as compensation. In such cases, parties in a divorce can agree to a structured settlement that will compensate a spouse over time.

Deferred Payments

The division of property for many divorces is a lump-sum settlement, in which both parties immediately receive the full value of their share of the assets. A structured settlement defers compensation, which one party will repay the other over time. So, a spouse who receives the marital home in the divorce may compensate the other spouse through monthly payments, often including interest. The court considers the owed payments to be part of the marital properties that are divided.


In a structured settlement, the recipient spouse is taking a role similar to a creditor. He or she is lending the value of the marital property in exchange for the promise that the other spouse will repay him or her. As with a creditor, the recipient spouse must consider the risks of entering a structured settlement:

  • Will the other spouse have the means to repay the debt?
  • Is the other spouse trustworthy?
  • What is the other spouse’s credit history and borrowing ability?
  • Can the recipient spouse afford to defer compensation?
  • Is the recipient spouse willing to go to court to enforce the agreement?

Strong Settlement

Legal confrontation may be unavoidable if the paying spouse is not obeying the structured settlement. The recipient spouse can add protections to help enforce the settlement, including:

  • Creating a payment schedule and penalties for missed payments;
  • Identifying other properties as collateral in the settlement; and
  • Connecting the paying spouse’s life insurance policy to the settlement in case of death.

Division of Property 

Structured settlements can be risky but may be preferable to selling a valuable marital asset. A DuPage County divorce attorney at Calabrese Associates, PC, can negotiate a fair division of marital properties that will properly compensate you. To schedule a consultation, call 630-393-3111.


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