Illinois couples who are considering a separation or divorce should also begin the process of evaluating their amount of consumer and other debts. When couples elect to divorce in Illinois, the partners are required to divide both their assets and debts between them. If the matter of debt and asset distribution is placed into the court system, the state’s equitable distribution guidelines will be used.

However, in most cases, these rules are not conducive to the wide variety of financial situations couples may be contending with. Also, it is important to understand that the state’s equitable distribution guidelines do not mean that all debts and assets will be divided equally. Instead, they will be divided in a manner that court deems to be fair and just based on the circumstances of the situation.

Prenuptial Agreements Often Fail to Include Provisions for Debt Accumulated While Married

In many cases, even if the couple had executed a prenuptial agreement that outlines the distribution of separate and marital assets, the issue of debt accumulated during the marriage was not included and planned for in the agreement. Many couples find that the best solution to amicably resolving the issue of debt accumulated during marriage is to work together to pay it off before beginning the divorce process. If this is not possible, each partner must be proactive about making sure that they do not take on more than their fair share of the total debt load.  

One of the most contentious issues in an Illinois divorce is the division of assets. Assets are considered either marital or nonmarital, but it is not always easy to determine which category an asset falls into. What if you owned a home before getting married and the mortgage was always in your name, but your spouse helped you make payments on it throughout the marriage? What if you inherited $10,000 from your grandfather, but placed it into a bank account that you shared with your spouse? 

In this blog post, we will examine the difference between marital and nonmarital assets and the factors that can help a judge determine how assets are categorized. The terms “assets” and “property” mean the same thing and are used interchangeably. Keep in mind that this article is not meant to be legal advice and that the best way to obtain a satisfactory asset division in your divorce is to hire an experienced divorce attorney. 

What is Considered Marital Property in Illinois? 

Generally, marital property is any asset, whether liquid (such as a savings account) or illiquid (such as a home) that was acquired during the marriage. Whether one spouse had his or her name on the title is not usually important if spouses acquired, jointly used, or jointly paid for the asset during the marriage. Common examples of marital property include:

Many financial issues will need to be settled during a divorce case, and determining how to divide marital assets and debts will often be one of the primary concerns that spouses will need to address. In some cases, the property division process may be fairly straightforward, but it can become more complex when a couple owns multiple types of financial assets. Retirement benefits are one form of property that can complicate divorce proceedings, and spouses will want to understand their rights regarding these assets and the methods they can use to avoid financial penalties.

Dividing Retirement Assets

Spouses may save money in multiple types of retirement accounts, including employer-provided plans such as a 401(k) or an individual retirement account (IRA) that they have set up on their own. Even though these accounts may be in one spouse’s name, they will usually be considered marital assets if contributions were made to the account during a couple’s marriage. Fortunately, determining the value of these assets can be fairly simple, and the balance of an account may be divided between spouses during the divorce process.

Pension benefits that one spouse is eligible to receive will also be considered marital assets, as long as the spouse was married while working in the job where these benefits were earned. However, determining the value of these benefits is not always easy, especially if the spouse does not expect to retire until many years or decades in the future. The best way to deal with these assets is to agree that a certain percentage of the benefits will be paid to the person’s ex-spouse. Usually, this percentage will be based on the number of years the couple was married compared to the total number of years they worked in the pension-eligible position throughout their career.