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Child custody, finances may cause tension during divorce
In addition to facing the emotional hang-ups associated with divorce in Illinois, people going through the process must also deal with the financial challenges that come along with it. Addressing financial matters is especially stressful for divorcing individuals who have children because the children depend on their parents for support, and the divorcing couple is likely dealing with child custody matters at the same time. However, a few tips may help people plan their finances in a manner that will benefit both them and their children long after the divorce has been finalized.
First, it is important to prepare for the worst financially. This is particularly true for those whose divorce processes have not been amicable. A soon-to-be-ex may not be generous and compassionate if the other hits hard financial times, even if the other ends up having primary custody of the kids. In addition, a person getting divorced would benefit from educating himself or herself on principles related to retirement plans, taxes, insurance and house mortgages.
Mistakes can be financially detrimental during divorce
Going through the divorce process can have a major impact on a person's finances in Illinois. Unfortunately, making missteps may make this type of family law proceeding even costlier. Several mistakes may be avoided during divorce with the help of proper legal and financial guidance.
First, it is important to closely examine all assets that are jointly held. Assets about which a person does not know cannot be factored in during negotiations for a just settlement. It is wise to look not only at current non-monetary assets and accounts but also to look carefully at future interests, such as start-up business stock options, business interests or pensions.
Paying attention to taxes is another important part of navigating the divorce process. For instance, a spouse who is getting a $500,000 house faces different tax burdens should he or she decide to sell the home than does a spouse getting distributions from a $500,000 IRA, especially over a period of time. Taxes have a significant impact on an asset's true value in the end.
Protecting credit score during divorce is essential
The divorce process in Illinois can be bittersweet, allowing a person to finally experience freedom from an unsatisfactory relationship while, at the same time, having to deal with the heartbreak associated with a marital dissolution. This divorce-related heartbreak includes not only emotional heartbreak but possibly financial heartbreak. A few tips related to credit scores may help people protect their financial futures when going through the process of divorce.
First, it is important to find out what one's credit score is. Good credit is an essential asset-one that must be diligently protected during a marital split-up. In some divorce cases, a spouse runs up large bills on credit cards and charge accounts, and this causes the other spouse to lose his or her good score.
Coping financially during the expense and turmoil of divorce can naturally be difficult, but there is a way to do this. First, it is important to automatically notify one's creditors that one will not be responsible for a soon-to-be-ex's debts any longer. Then, it is wise to revoke and destroy any credit card on which one has liability. Lastly, it is expedient to publicly disclaim liability for the debts the soon-to-be-ex will accrue in the future.
Divorce can have long-term financial impacts
With the new year afoot, now is the proper time for people going through the process of divorce in Illinois to ensure that they start out the year financially on the right foot. Failure to do so can unfortunately have long-term negative consequences. A few tips may help individuals to make expedient decisions while considering the financial impact of divorce.
During the marital dissolution process, a person's mind can quickly become hazy amid the emotional and financial stresses with which he or she may be confronted. It is unfortunate that this happens during a period where critical moves and decisions must be made. Divorcing individuals may thus benefit from taking the time needed to write their goals down, as the writing process helps them to gain clarity.
It may also be helpful to avoid distractions, such as music, when thinking about one's goals during and after the divorce. Whether a person is taking a walk, driving in a car or walking on a treadmill, he or she can simply think about what is most essential to him or her instead. When a person determines what he or she considers to be essential, this person can better determine how he or she will afford his or her lifestyle following divorce.
Child custody a major area of concern during divorce
The divorce process in Illinois can be liberating for a person who has felt stuck in an unfulfilling marriage, but it can also be emotionally challenging. This is particularly true when the divorce involves child custody, which can be tough to cope with not only for the parents but also for the children. A few tips may help the divorce process to go as smoothly as possible for children in Illinois.
First, it is wise to try to avoid a situation where the children end up having to go to a new school due to the divorce. This is because when a child has to go to a different school, he or she loses his or her support group and friends, which can make the divorce even more difficult. Introducing the least amount of change to a child following divorce gives the child more stability.
It is also wise to avoid using children as trophies or pawns in an effort to hurt the other party because this often ends up hurting the child. This usually occurs when a child decides to move away from his or her brothers and sisters to stay with the other party, where he or she is showered with gifts that his or her siblings do not get. This can pit the kids against each other, leading to a persistent emotional battle.
Several steps can help people to prepare for divorce in 2016
Filings for divorce are expected to surge in the next few weeks as some married people opt to begin the New Year with a totally clean slate. However, divorce is often a complicated process — one that has financial and legal implications that may be costly to overlook. Those in Illinois who are planning to dissolve their marriages in 2016 can take some steps now to prepare for the process.
First, it makes good sense to retain legal counsel, and it may also be smart to seek the assistance of a financial planner and a psychologist. The psychologist can help a person to make certain he or she is thinking clearly when deciding to get a divorce. Meanwhile, a certified financial planner can outline how a divorce may impact one's finances in both the short term and the long term. It is best to employ professionals outside of the family in order to ensure that the discussions remain confidential.
The presence or lack of a prenuptial agreement, which can be used to outline how two married people's assets are to be divided in the event of divorce, also has an impact on the proceedings. If a prenuptial agreement is in place, it would be wise to go over this with legal counsel. If there is no prenuptial agreement, marital assets will end up being divided according to the prevailing equitable distribution laws in Illinois.
Child custody issues can be challenging during holidays
Although Christmas is often described as being the most wonderful season of the year, it can be one of the most stress-causing times, too. Families are consumed with completing their long to-do lists and attending Christmas events. However, being divorced can make things even more complicated, both for the adults and for the children. A few tips may help people to effectively handle child custody issues during the holiday season in Illinois.
First, it is good to avoid the drama of splitting time, as this can be uncomfortable for all of the parties involved. Children particularly get confused regarding what they are supposed to say or how they should act when dealing with these situations, as they do not want to make either parent upset. It is best to settle split-time complications behind the scenes for the children's sake.
It is also important not to turn the Christmas season into a competition regarding which parent can be the most fun by spending the most money. After all, a child's love cannot be bought. Finally, it is wise to avoid giving children gifts that come with strings attached. For instance, it is best to avoid choosing a gift that can only be kept at one parent's home, as this can make the divorce situation even harder on the child.
Later-in-life divorce rates on the rise
Divorce that happens later in life, also known as silver divorce, is becoming increasingly common in Illinois and other states. In the year 2014, people who were 50 years old or older were two times as likely to divorce as they were back in 1990. For those older than 65, the increase in divorce rates was even greater.
While divorce among older individuals is on the rise, divorce rates have actually dropped or leveled out among people of other ages. One possible reason for this is that many older individuals are in their second marriages. The rate of divorce is 2.5 times more for remarried individuals, as these people often deal with the difficulties associated with being in blended families and also face bigger financial challenges.
p>Life expectancy additionally plays a major role in the rising divorce rate among older people. People simply died earlier in the past than they do today. Another huge reason for a larger number of divorces today is that women initiate nearly 60 percent of marital dissolutions that occur after the age of 40, so more women are taking decisive steps today.
Divorce process can be financially complicated
An Illinois divorce is a complex process that may cause a person to feel as though his or her life is spiraling out of control. Many struggle to cope with the emotional challenges of divorce along with the financial ones. A couple of tips may help to navigate the divorce process successfully.
First, it is critical to create copies of all financial records and statements. Producing copies of savings and checking accounts might be obvious. However, it is also important to have copies made of retirement accounts and 401(k)s, tax returns, insurance policies and other financial documents. Once this information has been collected, it's wise to store them in a secure location.
Second, it is smart to obtain a copy of one's credit reports. Efforts can be made to improve scores that have been impacted by financial issues within the marriage. If no individual credit has been established, now is a good time to start creating it. Opening an individual bank account and obtaining a personal credit card are important steps in becoming financially independent.
Retirement accounts require attention during divorce
Going through the divorce process in Illinois can be costly both financially and emotionally. One of the major areas of contention during this type of family law proceeding is the division of assets. A few tips may help people going through divorce to specifically address matters involving retirement savings.
The different types of retirement accounts call for different types of paperwork. A legal document known as a qualified domestic relations order, or QDRO, may be used to ensure the proper distribution of a person's 401(k) funds. The document divides the retirement account with a party, such as a dependent, spouse or ex-spouse, and asserts that it is within each person's right to have some of the money.
The benefit of a QDRO is that it eliminates penalties or taxes from taking any early distributions of the retirement plan. All employer-sponsored retirement plans and pensions require separate QDROs. Meanwhile, individual retirement accounts, or IRAs, require what is known as a transfer incident — which also allows a person to move funds without creating unnecessary tax burdens.
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