Marriage is a financial partnership between two people, so divorce is bound to have an impact on your finances. The financial issues in a divorce can include marital property division, spousal maintenance, and child support. It is essential to understand the issues involved and how divorce can affect your finances in the future.
How can divorce affect your standard of living in Chicago?
When both spouses work, the household has two sources of income during the marriage. Family members become accustomed to the standard of living the combined income of both spouses can provide. After a divorce, one source of income goes away, which can lower your standard of living. You may have to reassess your finances and make adjustments. It is also important to have an experienced divorce attorney assist you in making the right decisions while you are going through a divorce.
How are property, assets, and debts divided?
Illinois is not a community property state – it is an equitable distribution state. State law requires an equitable division of marital assets. This means the split must be fair, but not necessarily equal. It is up to a family court judge to determine what is fair. The court does not automatically divide the marital estate down the middle, 50/50. Instead, it considers various factors to determine what percentage each spouse will take away from the marriage. These factors include:
- Length of the marriage
- Any prenuptial agreements
- Age, health, and earning potential of each spouse
- Debts and financial needs of each spouse
- Economic circumstances of each spouse
- Opportunity of each spouse for future acquisition of income and assets
- Any obligations from a previous marriage (such as child support)
- Contributions to the marital property, including homemaker contributions
- Any dissipation of marital assets by either spouse (when a spouse wastes or misuses marital assets right before or during a divorce)
- Custodial arrangements for any children of the marriage
- Whether the family home should be awarded to the spouse with physical custody of the children the majority of the time
- Tax consequences of the property division
Divorcing spouses in Chicago or North Shore can agree out of court on how marital property should be divided on their own, or with the assistance of a lawyer or a mediator to help them negotiate a settlement. When divorce is contentious, this can be a long and tedious process. If the spouses are unable to reach an agreement, they go to trial, and a judge decides the matter of property division.
Must all property be divided in a divorce?
Not all property must be divided in a divorce – only marital property. Under Illinois law, marital property includes any and all property acquired by either spouse after the marriage.
Exceptions to this rule include:
- Property acquired during the marriage in exchange for property acquired before the marriage
- Property excluded from the marital assets by a valid agreement (such as a prenuptial or postnuptial agreement) between the spouses
- Property acquired through inheritance (gift, legacy, or descent) during the marriage
- Property acquired after a declaration of legal separation
Will spousal maintenance be awarded in a divorce?
For spousal maintenance (alimony) to be awarded, the court must find that it is appropriate given the circumstances of the case.
There must be a significant difference in the financial situations of the spouses.
If spousal maintenance is determined to be appropriate, the court will award guideline maintenance if the combined annual gross income of the parties is less than $500,000 and if the payor is not obligated under a previous court case to pay maintenance or child support.
Maintenance is calculated by subtracting 25% of the payee’s net annual income from 33 1/3% of the payor’s net annual income. The duration of spousal maintenance will depend on the length of the marriage.
How are child support payments determined?
The incomes of both parents are considered in calculating child support. The calculations are based on the net combined incomes.
- The net income of each parent is determined.
- Net incomes of both parents are added together to arrive at the combined net income amount.
- A percentage of the combined net income is determined for each parent.
- The basic child support obligation is determined based on the combined net income using an income shares chart.
- The basic child support obligation is multiplied by the percentages for each parent.
- Resulting numbers are the child support obligations of the parents.
The child support obligation of the non-paying parent (typically the parent with the most parenting time) is presumed to be already applied to the child. The obligation of the paying parent must be paid to the non-paying parent. Beermann LLP is an award-winning divorce and family law firm established more than 60 years ago. When everything is at stake, we are the law firm you can trust.