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Being proactive with finances can help after divorce
A divorce can be emotionally draining. It can also significantly impact personal finances. This is true no matter what a person's net worth may have been before the proceedings started. A couple of tips may help individuals to take care of themselves financially during and after an Illinois divorce.
First, it is essential for a person to re-title his or her assets following divorce. If two people owned assets jointly and one person retains some of these assets, they need to be re-titled in that person's name or in the name of the person's new living trust if he or she decides to establish one. This is especially critical for large assets, such as the family home.
Next, becoming familiar with investing may be appropriate. This is especially essential for people whose ex-spouses were the ones who used to handle the investing. It is smart to make a detailed analyses of all investments to assess their short and long-term benefits. Enlisting the help of a financial advisor to accomplish this may be helpful.
Decisions made during divorce may have tax-related effects
Tax season can be a complicated time for anyone in Illinois, but it may be especially challenging for those who are going through the process of divorce. The wrong decision during a divorce proceeding can have negative tax implications down the road. Some tips might help people to make smart decisions that will benefit them tax-wise in the years to come.
First, a qualified domestic relations order, or QDRO, allows divorcing spouses to roll a part of one party's pension plan into an IRA account of the other spouse without tax on the rollover. In this situation, the early distribution penalty will be waived. However, this does not automatically mean that rolling over pension plans is the best choice.
Rollovers offer distance from former spouses. They also allow people to have more control over their investments as well as more beneficiary designation choices. Another benefit is the possibility of deducting fees and no required withholding. However, remaining in the pension plan of a former spouse also has benefits; it could mean access to the fund for a person who is below 59.5 years old, along with potential protection from creditors.
Wise decisions may prevent bankruptcy following divorce
Divorce is often a stressful process because of both the financial and emotional components of this type of family law proceeding. Unfortunately, the divorce process has the potential to cause a person to go bankrupt. A few tips may help people in Illinois protect themselves financially in divorce.
When people get hurt or are betrayed, they naturally become angry. Therefore, it is normal to be angry and even feel resentment during the divorce process. However, it is not wise to treat the legal process like a weapon for wielding revenge on one's future ex-spouse. Trying to get back at one's future ex through the legal process will only end up costing large sums of money as well as two or three years of one's life.
This money is better spent purchasing the marital home or saving for retirement following the divorce. Likewise, it is better to spend time with the children than to financially harm one's ex-spouse. Divorce mediation is one potentially helpful way to reach a resolution during divorce that is beneficial and thus pleasing to both parties.
Myths about divorce might lead to poor decision-making
Sometimes divorce is inevitable if two married individuals have irreconcilable differences. Unfortunately, it can also be a stressful period for individuals in Illinois. Myths about the divorce process may cause individuals to make choices that might ultimately hurt them.
One of the top myths is that visitation may be denied if one's ex-spouse does not make child support payments. A process does exist to enforce obligations related to child support; however, threatening an ex or denying him or her visitation with his or her child is not considered one of them. Access to parenting time and the children has no link to child support.
Another common divorce-related myth is that committing adultery will cause a person to lose everything in a divorce. Cheating understandably may lead to divorce, but being unfaithful does not mean one will lose one's children, assets, home and rights. However, committing adultery and then wasting martial assets may be a factor in equitable distribution issues during the divorce process.
Focus on finances important in the midst of a divorce
When people get divorced in Illinois, one of their concerns naturally may be how they will be able to stay ahead financially. After all, in addition to causing emotional grief, a divorce can easily cause financial problems. A few tips may help people to take care of themselves financially following divorce.
First, if one is not working in a particularly lucrative field, it may be necessary to transfer one's stills to a position in a more lucrative and in-demand industry. This is a major part of making a financial transformation. Another step in the transformation process is to adjust how one spends and saves money.
Sometimes downsizing is one of the wisest things a person can do after getting divorced, as this can put a person in a more comfortable financial situation. In addition, it is important to attack any outstanding debt and say no to purchasing unnecessary items. The more frugal one can be, the more easily one can bounce back from the financial difficulties that often arise from divorce.
Asset division critical part of divorce process
Although divorce in Illinois can be a financially and emotionally trying process at any age, people going through gray divorces — or divorces in their later years — face a special challenge. They are closer to retirement and thus have less time to financially bounce back from a divorce before they reach their golden years. A few tips may help individuals to navigate the divorce process while protecting their retirement plans.
First, it is essential to take an inventory of all of one's assets. Any marital asset may become a potential retirement asset. It is especially important to consider assets, such as obscure employment benefits, including deferred compensation, stock options, HAS accounts, pension values and bonuses when dividing assets as part of a divorce.
It is additionally important to understand the risks that accompany different types of assets. For instance, one person may agree to allow his future ex-wife to run her business, but he would get 50 percent of the business's proceeds upon her sale of the business. The ex-wife might have promised to sell the business soon but then later changed her mind years after the divorce. In the meantime, the ex-wife is the only one who gets to benefit from the business's cash flow.
Determining who gets to keep the pet can be tricky during divorce
Nearly 80 million households in the United States, including many in Illinois, own pets. In modern society, more Americans are delaying giving birth to children, so pets have become an increasingly important — and contentious — aspect of divorce. Determining who will get custody of a companion animal can be tricky when two divorcing individuals do not agree on the issue.
From a traditional point of view, pets are viewed as property by the law. That means they are seen as being similar to house plants and couches. However, emotional attachment may turn beloved pets into valuable bargaining chips during divorce negotiations.
Judges have a great deal of discretion when it comes to dividing property during a divorce. People can strengthen their claims if they can prove that they used their own money — money they earned before getting married — to purchase the pets or pay for their veterinary bills. Judges are now also looking at other factors during divorces involving pets, such as considering the pets' best interests, as well as the best interests of the family members who love them.
Common mistakes can be costly during divorce in Illinois
Whether in Illinois or another state, the divorce process can feel like a roller coaster — not just emotionally but also financially. Unfortunately, failure to anticipate the twists and turns and to prepare for them accordingly may be costly. A couple of tips may help people to protect themselves during a divorce.
First, for a person who has children, a temporary custody order may help to create stability during this intense time for the family. Likewise, temporary child support payments may help to make sure that the children's basic needs are being met, such as day care costs, housing, clothing and food. Temporary alimony may also provide the spouse who earns less with money needed to cover his or her living expenses.
In addition, a mistake that is often made during divorce is to delay getting in touch with an attorney. Once a person files for divorce, essential decisions, possible court dates and deadlines quickly become focal points. This is why being as informed as possible is so paramount.
Divorce impacts Social Security benefits
The divorce process can be both emotionally and financially challenging in Illinois, regardless of how long two people have been married. However, timing a divorce properly may lead to financial benefits in the form of Social Security. People who are close to their 10th wedding anniversary may want to hold off on getting divorced until after they have married for 10 years, as this may lead to higher Social Security payments for those who have spouses with earnings that are higher than theirs.
Based on information from the Social Security Administration, even if someone is divorced, he or she can get benefits based on his or her ex's record. This is true even if the ex has remarried. These benefits are available if the couple's marriage lasted a decade or more and the person is not currently married.
Social Security benefits based on an ex's record can also be awarded if the ex is at least 62 years old and if the benefit that one is entitled to receive as an ex-spouse is larger than that which one would get based on one's own work record. In addition, the benefits are available only if one is entitled to disability or Social Security retirement benefits. The collection of an ex's benefits has no effect on the ex's benefit or the benefit of the ex's current spouse, if he or she has remarried.
What if my ex does not have our child's best interest in mind?
Addressing child custody issues with a stubborn or irrational ex can be extremely frustrating for everyone involved. This issue can be exacerbated by accusations of abuse or neglect by one parent. Ultimately, every child custody agreement should reflect what is in the best interest of the child.
Most parents in Illinois probably do not envision heading to court when they ultimately decide to divorce, but sometimes that outcome is impossible to avoid. Accusations of abuse are quite serious, and family law judges can help issue rulings that will ultimately protect the child from any further neglect or wrongdoing. But what happens if the alleged abuse never actually occurred?
An increasing number of family law courts are now dealing with what is known as parental alienation. By definition, this is when one parent influences a child to turn against the other parent in a malicious manner. While this can be caused by constantly picking apart the other parent's shortcomings and flaws, it can also stretch to an extreme in which one parent accuses the other of abusing the child and also convinces the child that the abuse took place. This can take an enormous emotional toll on both the alienated parent and the child, although there is perhaps a silver lining. A study of 240 child custody cases found that when mothers accused fathers of abuse, the mothers had failed to gain primary custody 80 percent of the time, indicating that the few counts of actual abuse were taken seriously while the false claims were not.
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