If you were to ask a divorcing homeowner what their most valuable asset is, it is very likely that they would say it is their home. Not only are houses often worth hundreds of thousands of dollars, but they also usually carry some sort of sentimental value to the people who live in them. Many people have an emotional connection to their family home, especially when they have lived there for years, raised their children in that home, and made so many warm memories there. Unfortunately, you cannot simply just cut a home in half when you get a divorce. One of the biggest arguments that can arise from divorce is determining who gets to claim ownership of the house.

Equitable Division in Illinois

According to the Illinois Marriage and Dissolution of Marriage Act (IMDMA), all marital property in Illinois is divided in an equitable manner between the spouses. Marital property is considered to be anything that you or your spouse acquired while you were married but before a legal separation. Certain property is excluded from marital property, however. This includes gifts, property acquired by inheritance or legacy, property excluded from the marital estate through a valid prenup or postnup, and any property that was acquired by either spouse before the marriage.

Dividing Your Home’s Value

In most cases, there are typically only three different situations that can come out of this: you can either continue to co-own the home in the same manner, the spouse who wants the home can “buy out” the other spouse for their half of the home, or you can sell the home and split any proceeds you have from the sale:

Reaching an agreement on divorce issues like property division, child custody, and spousal maintenance is often difficult to do without help. If you are considering divorce, you may be looking for alternative dispute resolution methods including collaborative law and mediation. These methods may allow you to reach an agreement about the terms of your divorce without going through a stressful and expensive litigation process. Reaching an agreement without court intervention may also allow you to keep the divorce as amicable as possible. However, these dispute resolution methods may not be for everyone. A skilled divorce attorney can provide personalized guidance about how best to resolve disputes during divorce.

Working With a Mediator to Negotiate Divorce Issues

During divorce mediation, divorcing spouses work with a mediator to discuss the unresolved divorce issues and, ideally, reach a mutually agreeable solution to those issues. The mediator helps the couple find common ground, explore possibilities, and negotiate the issues constructively. Mediation has worked for countless couples, however, there are limits to mediation. A mediator cannot give you legal advice and cannot represent you in court should your case end up going to litigation. Mediation may not be appropriate if a spouse has a history of abuse or if there is a major power imbalance between the spouses.

The division of assets is often one of the most complex aspects of a divorce case. Whether spouses negotiate their own property division agreement, or the court makes a decision on their behalf, a fair asset division arrangement can only be reached when both spouses are honest and forthcoming about their finances. However, spouses are not always as truthful as they should be. Some divorcing spouses may attempt to influence property distribution during divorce by withholding or falsifying information. If you are getting divorced, and you are worried that your spouse may lie about financial information in an attempt to avoid sharing these assets, an experienced divorce attorney can help you uncover this type of deception.

Start Preparing Now by Copying Financial Documents

You may be in the very beginning stages of the divorce process. Perhaps you have not yet even filed for divorce. However, it is never too soon to start preparing. One of the best things you can do to protect your right to a fair division of property is to educate yourself about your financial situation. Read over important financial documents so that you can have a full understanding of the assets that you and your spouse own. These documents will provide valuable insight into your family's finances, and they may also be crucial pieces of evidence in the event that your spouse attempts to conceal assets from you. It is important to make copies of:

The term “dissipation” refers to assets that are wasted, destroyed, or used recklessly near the end of a marriage. When a spouse uses assets for a purpose not related to the marriage while the marriage is undergoing a breakdown, the other spouse may have a valid dissipation claim. Illinois law describes what type of spending constitutes dissipation and when the spending must occur in order to qualify as dissipation. If you are planning to get a divorce, and you have reason to believe that your spouse has squandered assets, a divorce lawyer experienced in handling dissipation claims can help protect your rights during the division of marital property.

What Type of Spending Is Considered Dissipative?

The Illinois Supreme Court defines dissipation as “the use of use of the marital property for the sole benefit of one of the spouses for a purpose unrelated to the marriage at a time that the marriage is undergoing an irretrievable breakdown.” Spending money on groceries, utility bills, or other legitimate needs is not considered dissipative. However, spending that is wasteful or reckless in nature may be considered dissipation. In previous Illinois divorce cases, the following types of spending have been deemed as dissipation:

Marriage is not only a romantic relationship, but it is also a financial partnership. Consequently, the complexity of any divorce case is largely determined by the couple’s finances. Divorcing couples who do not own significant assets are often able to resolve divorce issues such as property division much faster than those with more complicated financial portfolios. Many high net worth individuals own assets such as business holdings, real estate, stock options, and more. These complex assets can significantly influence the divorce process. Therefore, if you are contemplating divorce, it is crucial for you to have legal assistance to ensure your rights are protected during the proceedings.

Determining the Worth of Hard-To-Value Assets  

Typically, the more wealth an individual has, the more likely he or she will be to have put that wealth toward investments. High net worth individuals may own a variety of assets in many different classes. Many of these assets may not be owned by the person himself or herself, but they may instead be contained in businesses, holding companies, or investment structures. For example, he or she may own assets such as retirement plans, pensions, life insurance policies, stock options, restricted stock, brokerage accounts, and deferred compensation. An individual may also have invested in fine art, an extensive wine collection, antiques, or other high-value items. Before these assets can be fairly divided during a divorce, the assets must be properly inventoried and valued. In many cases, the assistance of financial appraisers or other experts will be required to establish a value for all of the property owned by a couple.

If you have decided to divorce your spouse in Illinois, you may be researching your options. Divorcing spouses who struggle to reach an agreement regarding property division, spousal support, the allocation of parental responsibilities, parenting time, and other issues may benefit from an alternative dispute resolution method called “collaborative divorce.” As the name suggests, this type of divorce is a cooperative process that aims to resolve divorce issues using amicable negotiation and discussion without the need for direct judge oversight. Read on to learn more about what this beneficial process entails.

What Is a Participation Agreement?

During a collaborative divorce, each spouse is represented by an attorney who has received special training in collaborative law. The spouses and their lawyers hold several meetings during which they identify the divorce issues that still need to be settled and work to find resolutions to these matters that both spouses can agree on. The lawyers and spouses may also work with other professionals like financial planners and child specialists during the collaborative process. The members of the collaborative team sign a “participation agreement” in which they promise to:

Research shows that prenuptial agreements, or “prenups,” are becoming increasingly popular – especially for the millennial generation. Many millennials are getting married later in life compared to their parents or grandparents. They may already own a home, a small business, or have other substantial assets by the time they tie the knot. They may also have accumulated significant debts, such as student loans. A prenuptial agreement is a great way for couples of any age to define and protect their financial rights in the event that their marriage ends in divorce. If you are considering creating a prenuptial agreement, it is essential to know the common mistakes that can make this important legal document invalid.

Financial Transparency Is a Requirement

A prenuptial agreement mainly deals with financial issues such as property or asset division and spousal maintenance (alimony). In order for a couple to come to a resolution about the details of their prenup, they must both fully disclose all of their assets, income, and debts. If a spouse lies about his or her finances, then the terms contained in the prenuptial agreement are based on misinformation. If the couple does end up filing for divorce, and it is determined that the prenuptial agreement was founded upon false financial information, the document may not be legally enforceable.

The Holmes-Rahe Life Stress Inventory lists divorce as the second-most stressful experience a person can endure. You may be surprised to learn that according to the inventory, the end of a marriage is considered to be more stressful than being fired from your job, the death of a close friend, and even experiencing a major injury or illness. If you are considering divorce, you know just how mentally taxing it can be. Fortunately, many people are able to build a post-divorce life that is much happier and more serene than they could have imagined. Because the divorce process can be so trying, it is essential that you make your mental well-being a priority during this time. The following tips can help you address the difficulties you may experience during your divorce.

Allow Yourself to Grieve the End of Your Marriage 

Some people assume that if they are the party who initiated the divorce, then they have no reason to be sad about the end of their marriage. This is simply not true. It is completely normal to feel sad and disappointed about your divorce -- even if the split was your idea. You may have had hopes and dreams of what you wanted your marriage to be, and you may be deeply upset that you were unable to meet these expectations. Regardless of why your marriage is ending, give yourself time to grieve this loss, and do your best to avoid bottling up your emotions. Many mental health experts suggest that writing your feelings down in a journal can help you work through these emotions and heal.

Property division during divorce can vary significantly in its complexity. If a divorcing couple does not own a home or significant assets, the division process is typically more straightforward. However, if the couple has complex assets such as a family business, the division of property will be much more complicated. Illinois courts use a method called “equitable distribution” to split marital assets and property. This means that the marital estate is divided fairly based on each of the spouse’s contributions to the estate, their financial circumstances, and other relevant factors. Before a family-owned company can be divided in a divorce, the value of the business must be determined. There are several different ways to perform a business valuation, so read on to learn which option will work best for your situation.

Determining the Monetary Value of a Business

The business valuation method used by a couple during divorce will depend largely on the couple’s plans for the business moving forward. If the couple is going to sell the business, one way to determine the value of the business is by comparing the business to similar companies that were recently sold. This is referred to as a “market approach.” Another way to value the business is to use an “asset approach.” This involves calculating the total value of the assets owned by the business and then subtracting the business’s liabilities. In an “income approach” to business valuation, the present value of projected future income is used to determine the value of the company. 

One of the most contentious parts of the divorce process is often the division of marital property. Divorcing couples have the option of dividing property on their own, but couples who cannot reach an agreement will require court intervention. Illinois courts divide marital assets and debts according to “equitable distribution.” Unlike other states that divide the marital estate exactly in half, Illinois instead considers a variety of factors to determine an asset division arrangement that is fair and reasonable for both spouses. If a couple has a high net worth or owns complex assets, the property division process can become especially complicated.

Differentiating Between Separate and Marital Property is Not Always Straightforward

Only marital property is divided during an Illinois divorce. Marital property generally includes property obtained by either spouse during the marriage. Separate property typically includes any assets or debts that the spouses acquired before the marriage took place as well as certain gifts and inheritances acquired throughout the union. Differentiating between separate and marital property is not always as easy as it may seem. Assets that are commingled can lose their identity and be transmuted from separate property to marital property. For example, if a spouse receives an inheritance from a relative during the marriage, those funds are typically considered separate property. However, if the spouse uses some of those funds to pay for shared expenses during the marriage, the funds may be transmuted into marital property.  

If your marriage is coming to an end because your spouse cheated on you, you may wonder how this could affect the divorce process. Illinois is a “pure no-fault” state, which means that there are no fault-based grounds for legally terminating your matrimonial union. If you and your spouse are getting divorced in Illinois, you will simply list “irreconcilable differences” as to the reason that you are seeking a divorce. However, marital infidelity can still affect your divorce proceedings in several important ways.

Assets Wasted During an Affair Can Constitute Dissipation

Illinois law prohibits courts from considering cheating or other types of marital misconduct when making property division, child support, or spousal maintenance decisions. However, there are several exceptions to this rule. According to the Illinois Supreme Court, “dissipation” occurs when a spouse uses marital funds or property “for a purpose unrelated to the marriage” while the marriage is “undergoing an irretrievable breakdown." Dissipated assets can include money spent on gifts or vacations for a secret lover, property which was sold in order to fund the affair, or other assets which were used to benefit the paramour. If you and your legal counsel can prove that your spouse dissipated assets, you may receive a proportionately larger share of the marital property in the divorce.