b2ap3_thumbnail_divorce-finances_20201014-015550_1.jpgWhen “yours” and “mine” becomes “ours” in a marriage, undoing this financial entanglement through divorce can be quite complex. If you are planning to divorce and you or your spouse have significant credit card debt, you may be wondering who will be responsible for paying this debt. Depending on the circumstances under which credit card debt was accumulated and used, it is very possible that both spouses will be responsible for repayment.

Who Pays the Credit Card Balance?

Illinois courts divide marital property equitably but not necessarily evenly. Marital property refers to the assets and debt acquired during the marriage by either spouse. Save for certain inheritances and gifts, any property or debt obtained while the spouses are married is included in the marital estate. Property accumulated before the marriage is typically classified as nonmarital property and is assigned to the original owner. This means that typically, spouses are not jointly responsible for credit cards that were opened before the marriage and are in only one spouse’s name. However, spouses may be liable for credit card debts that were accumulated during the marriage – even if only one of the spouses made the credit card purchases. A spouse may not even become aware of credit card debt until he or she begins to examine financial documents in preparation for divorce. This is one reason that taking a full inventory of your property and debts during divorce is so crucial.

How Should Joint Debt Be Dealt With?

Credit card companies do not take marital status into consideration when collecting debt repayment. This means that if your spouse is responsible for making payments and fails to do so, you could be pursued by creditors. Many experts suggest paying off debt prior to filing for divorce, however, this is not always feasible. Another option is to use marital funds to pay off marital debt during the divorce. These funds may be from a savings account, the proceeds from the sale of your home, or another source. You may also want to consider negotiating a settlement in which you take responsibility for the joint debt and are awarded other marital assets in exchange. This helps you avoid having to trust your soon-to-be ex-spouse to continue making payments on the debt after the divorce is complete.

Contact a St. Charles Property Division Lawyer

The division of marital property and debt can be a complicated and contentious issue during divorce. For dependable legal guidance regarding these and other divorce issues, contact Shaw Family Law. Call our office at 630-584-5550 today and schedule a confidential case consultation with one of our Kane County divorce attorneys today.

 

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IL divorce lawyerPrenuptial agreements are often misunderstood. Some people mistakenly assume that a prenuptial agreement is only for the extremely wealthy or for individuals who plan to get divorced. In actuality, prenuptial agreements, or “prenups” for short, are valuable legal tools that benefit both parties in a marriage. Read on to learn about the many ways that a prenuptial agreement can benefit you and your soon-to-be spouse.

Establishing Each Spouse’s Property Rights and Responsibilities

The main purpose of a prenuptial agreement is to decide in advance how the couple wishes to divide debts and assets should they later decide to divorce. While this may not be a very romantic possibility to consider, it is an important step to take. Keep in mind that creating a prenuptial agreement does not mean that you and your spouse intend to get divorced. However, current research shows that just over 40 percent of marriages end in divorce. Preparing for this possibility simply means that you and your partner understand that there is a chance that the marriage will not work out. Signing a prenuptial agreement is crucial if:

  • You have children from a previous marriage
  • You own complex assets such as a business, stocks, stock options, and long-term investments
  • There is a significant discrepancy between you and your partner’s income and assets
  • You or your partner have accumulated significant debt

A prenuptial agreement allows you to decide what property belongs to each spouse, which spouse should be accountable for certain debts, and whether spousal maintenance or alimony will be paid should you get divorced. A prenup can also address inheritance issues, the ownership of death benefits from life insurance policies, and several other concerns.

Opening up an Important Dialogue Regarding Finances

If you are interested in creating a prenuptial agreement but are unsure about bringing up this idea to your partner, there are a few things you should keep in mind. While a prenuptial agreement does determine how certain issues will be handled in the event of a divorce, this is not the only benefit of creating a prenup. Prenuptial agreements are also valuable in the event of a spouse’s death. Furthermore, numerous studies have shown that arguments about money is frequently cited as the top trigger for divorce. By having a frank, honest conversation about finances before getting married, you and your partner ensure that you are on the same page regarding money-related issues.

Contact a St. Charles Prenuptial Agreement Lawyer

Prenuptial agreements can address property, debt, inheritance issues, spousal maintenance, and more. However, these documents must meet certain criteria to be legally enforceable. If you are interested in creating a prenuptial agreement, contact Shaw Family Law, P.C. for help. Schedule a free initial consultation with a talented Kane County family lawyer by calling us today at 630-584-5550.

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IL family lawyerTypically, the more complex a divorcing couple's assets, the more complex the property division process will be. Dividing bank accounts and personal property like vehicles and household furniture is often much more straightforward than dividing a small business. First, the business must be classified as either marital or nonmarital property. Next, the business must be properly valued. Divorces involving businesses are often complicated, so getting guidance from an experienced divorce lawyer is crucial.

Is The Business Considered Part of the Marital Estate?

You and your spouse have the option to design your own property division arrangement during divorce. You may be able to negotiate property distribution concerns with help from your prospective attorneys or you may be able to reach an arrangement during family law mediation. If you cannot reach an agreement, the court will intervene and make property division decisions on your behalf. In Illinois, courts make property division decisions based on the theory of “equitable distribution.” Marital property, meaning property acquired by either spouse during the marriage, is divided in an equitable, or fair manner. Nonmarital property includes property acquired before the marriage, gifts, and inheritance. Nonmarital property is not divided and is instead assigned to the spouse who owns the property. If you acquired your business during the marriage, it will most likely be treated as a marital asset. If your business was inherited, received as a gift, or was obtained before you got married, it will likely be classified as nonmarital property.

Valuing a Business During Divorce

If a business is considered a marital asset, the court will use the value of the business during property division decisions. There are several ways to determine the fair market value of a business. The “income approach” to valuing a business involves calculating the present value of the estimated future income from the business. In an “asset approach,” the total value of the business’s assets is divided by the business’s liabilities. Another method for determining the value of your business is the “market approach” which estimates the approximate value by comparing the business to similar businesses that have recently sold. The value of the business will be used to determine how marital property is divided. If one spouse retains ownership of the business, the other spouse will likely be assigned marital property of similar value. Divorcing spouses may also decide to sell the business and then split the proceeds. In some cases, a divorcing couple may even decide to retain joint ownership of the business after divorce.

Contact a Kane County Business Valuation Lawyer

Deciding how to handle a business during divorce can be quite challenging. You may be unsure of what the best option is for your unique situation. For dependable legal guidance regarding property division, business valuation, and more, contact Shaw Family Law, P.C. Call our office at 630-584-5550 today and schedule a consultation with a skilled St. Charles divorce attorney.

 

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IL divorce lawyerPrenuptial agreements, also called premarital agreements or “prenups,” are some of the most misunderstood legal documents in all of family law. The media often presents prenuptial agreements in a negative light. Television shows and movies can also add to the confusion and misinformation surrounding prenuptial agreements. The truth is that a prenuptial agreement can benefit both members of a marriage in a wide variety of ways.

Prenups Protect the Financial Interests of Both Spouses

The main purpose of a prenuptial agreement is to determine in advance how property and debt would be divided if the couple gets a divorce. Without a prenuptial agreement, assets are divided according to equitable distribution rules in Illinois. It is very possible that one or both spouses will not end up with the property that they wanted when the court makes property division decisions on behalf of the spouses.

  • A prenuptial agreement is especially important if:
  • There is a large difference in the spouses’ income or assets.
  • Either spouse has substantial debt.
  • The spouses have a blended family.
  • One of the spouses owns their own business.
  • One of the spouses has or plans to have long-term investments, vesting opportunities, or stock options from their employer.

In addition to financial protections, many couples find that the process of creating a prenuptial agreement itself is hugely beneficial. As part of drafting a prenup, you and your partner will need to list your assets and debts as well as make decisions about how finances will be managed during the marriage. Having an open dialogue about finances before the marriage can help reduce marital conflict in the future.

Getting a Prenuptial Agreement Does Not Mean You Believe the Marriage Will Fail

The number one falsehood about prenuptial agreements is that signing one means you have doubts about the success of the marriage. Some people falsely assume that a person would only get a premarital agreement if they do not trust their partner. This is simply not true. Just as getting car insurance does not increase your chances of getting into a car accident, getting a prenuptial agreement does not increase your chances of getting a divorce. Most couples enter into a prenuptial agreement because they take their financial responsibilities seriously and understand that all marriages have a possibility of ending. It is better to have a prenuptial agreement in place and not ever need it than to need one and not have it.

Contact a Kane County Family Law Attorney

To learn more about how a prenuptial agreement can benefit you and your partner or for other family law needs, contact Shaw Family Law, P.C. Schedule a free, confidential consultation with an experienced St. Charles family lawyer by calling our office today at 630-584-5550.

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IL divorce lawyerWhen two people marry, many of their possessions change from “yours” and “mine” into “ours.” Couples may share a home, vehicles, property, bank accounts, and more. When a married couple gets divorced, deciding which spouse should retain which assets can be quite difficult. There are many factors that can complicate the already complex process of property division. If you are planning to divorce and need help with asset division, contact an experienced family law attorney.

Complex Assets

Illinois couples have the option to make their own decisions regarding the division of the marital estate. However, couples who disagree about asset division may require court intervention. If a couple owns complex or high-value assets, it is likely that the process of property division will be much more involved. Assets which can complicate the property division process include but are not limited to:

  • Family businesses
  • Trusts
  • Stocks, bonds, and other investments
  • inheritances or gifts
  • Real estate
  • Pensions and 401ks
  • Deferred compensation
  • Royalties
  • Executive bonuses
  • Offshore accounts

Duration of Marriage and Age of Spouses

You may be surprised to learn that the divorce rate for people over 50 years of age has doubled since 1990. More and more older Americans are getting divorced. Many individuals over the age of 50 have accumulated a significant amount of money in a term life insurance, 401k plan, or retirement account. They may also be receiving Social Security benefits. The duration of a marriage can influence several aspects of divorce as well including asset division, child custody, child support, spousal maintenance, and more. When a marriage of 20 years or more ends, the process of untangling the spouses’ intertwined financial lives can be especially difficult.

Dissipated Assets

Property or funds which are wasted near the end of a marriage are referred to as “dissipated assets.” Examples of dissipated assets can include funds lost to gambling or drug addiction, money spent on a secret affair, and property which was destroyed by another spouse in an act of retaliation. In order to be considered dissipation, the frivolous spending must be “for the sole benefit of one spouse and for a purpose unrelated to the marriage.” Furthermore, the spending must take place “when the marriage is undergoing an irreconcilable breakdown.” Generally, an “irreconcilable breakdown” refers to the time when a couple stops making attempts at reconciliation. If you and your legal team can prove that your spouse dissipated significant assets, you may be given a larger share of the marital estate to compensate for the lost property or funds.

Contact a St. Charles Property Division Lawyer

If you are getting divorced and have questions about property division, contact Shaw Family Law, P.C. to get the answers you need. Schedule a free, confidential consultation with a knowledgeable Kane County divorce attorney by calling us at 630-584-5550 today.

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