Preparing Your Finances for a Divorce Can Smooth the Process

While the diamond in an engagement ring will last forever, marriages do not always last. The statistics indicate that as many as half of first marriages end in divorce. As relationships begin to break down, there may be threats of divorce, or the divorce may come as a complete surprise. When possible, planning ahead for divorce and meeting with a divorce attorney are ways to avoid making financial mistakes. There are also things that you can accomplish before meeting with an attorney, such as compiling a list of assets and debts, legal information, and identification information to help the process go more smoothly. Here are some things to keep in mind about your finances when considering a divorce. 

Marital versus Non-marital Characterization

Under Illinois divorce laws, marital property that you accumulate with a spouse during the marriage is subject to just and equitable division by the court. This does not necessarily mean equal division. On the other hand, non-marital property is not subject to division. Some types of property considered non-marital include: 

• A gift made solely to one spouse or an inheritance
• Property acquired prior to marriage or after legal separation
• A personal injury or workers’ compensation settlement

It is important to know that commingling assets may change the characterization. For example, if a large gift from your parents to you as part of an early inheritance is placed into a joint bank account, the funds may become marital and subject to division. It might be best to keep or set up a separate investment account in just your name for such funds. 

In some cases, a non-marital interest may remain even after the sale of a car or home owned before marriage. An attorney can review your individual circumstances as part of the property division process to determine marital versus non-marital property interests. 

Credit Cards and Joint Accounts

Each spouse should ideally have a credit card that is in just their name. This establishes an individual credit history, which helps down the road in obtaining an individual loan or mortgage after a divorce. When a trial separation does not work, and you plan to file for divorce, notify joint credit card companies to freeze or cancel the accounts. This may avoid the situation of an angry ex-spouse going on a shopping spree. Balances owed will usually need to be paid before canceling the account. 

Timing of Divorce

Often you have little control over the timing of a divorce; however, if you are the one planning to leave, you have more flexibility. In January and September, for example, the number of divorce filings typically increases because it is easier for many families to deal with a divorce after the holidays or summer vacation. Another consideration for a non-working spouse is retirement. If you have not had Social Security withheld from your wages, it could impact how much you receive in retirement. A marriage of at least ten years qualifies the non-working spouse for Social Security benefits through the ex-spouse’s earnings. If you are close to retirement, these considerations could impact when you choose to file for divorce.

A Skilled Family Law Attorney Can Help

When considering divorce, it’s important to have your unique circumstances reviewed by a qualified legal professional. The divorce process is complex, and mistakes could have lasting consequences. A lawyer can offer assistance and make sure that your rights are protected.

If you are considering divorce or have been served with divorce papers, Arami Law can help. We are a team of knowledgeable and compassionate Illinois family law attorneys dedicated to helping people navigate complex legal issues. Call our office or send us an online message today to learn more.