DuPage County division of assets attorneyA number of recent studies, including a survey by the National Endowment for Financial Education, found that 40 percent of American adults have been deceptive about money with their spouse, and about 75 percent admit that financial deceit has affected their relationships. Considering these statistics, it is not surprising that one of the most contentious issues in a divorce is the division of assets. It is not uncommon for one spouse to try to hide assets from the other in order to avoid having to share them in the divorce.

Finding Hidden Assets

When couples are dissolving their marriage, they are required to provide financial affidavits to the court which reveal any assets they have. Although providing false information to the court is illegal, many spouses would rather take their chances and lie about their assets so they do not have to share them with their soon-to-be ex-spouse.

If you are going through a divorce and think that your spouse is hiding assets from you, there are steps that you and your divorce attorney can take in order to find those assets, including:

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Wheaton property division lawyerNearly all financial aspects of divorce are complex, but few are quite as complicated and consequential as the 401(k). When a 401(k) is included in the division of assets, you may find yourself facing costly penalties if you do not take the steps to divide it correctly. Those who try to draw from their 401(k) to cover the expenses of divorce also often find themselves in financial trouble. However, with the assistance of an attorney, you can mitigate the risks of dividing your 401(k) and protect your assets for retirement.

Dividing Retirement Assets With a QDRO

Qualified domestic relations orders, or QDROs, are used to divide employer-sponsored retirement and pension plans in divorce. Their purpose is to allow for the transfer of a portion of the assets to an employee’s spouse without incurring income taxes or early withdrawal penalties. As such, they play a crucial role in preserving retirement savings for both parties in the divorce.

However, employers or third-party plan administrators often charge a fee for dividing a retirement account with a QDRO, so you should be prepared for the possibility of another expense during the divorce process. Fees and costs may increase if the QDRO is not drafted correctly, so it is important to work with an attorney who has significant experience with QDROs and dividing retirement assets.

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Wheaton retirement asset division lawyerThere are multiple decisions and negotiations that divorcing couples must grapple with. Many of these decisions are highly emotional, including the allocation of parental responsibilities, ownership of the family home, custody of the family pet, and even possession of sentimental personal items the couple has amassed during their time together. So many of these decisions revolve around the present that it can be easy to overlook the future issues, such as the division of retirement funds and pensions. For this matter especially, having a skilled divorce attorney assisting you can be critical.

There are many factors to consider when trying to determine how these funds will be divided, including tax implications and early withdrawal penalties if the transaction is not handled correctly. Knowing ahead of time the best way to manage each of these accounts can save a great deal of time, stress, and money.

Dividing Different Types of Retirement Accounts

Different retirement plans require different procedures for division in a divorce. Individual retirement accounts (IRA) are savings accounts that offer many tax advantages while enabling people to save for their retirement. These accounts are usually offered by financial institutions, such as banks and credit unions. Qualified plans, such as 401(k) or 403(b) plans, are employer-sponsored plans. Employees can contribute to these accounts and there are no taxes paid on the amount in the account until the employee actually makes a withdrawal.

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DuPage County property division lawyer for business valuationIn an Illinois divorce, a wide range of assets can be considered marital property, which must be equitably distributed between spouses. This includes joint bank accounts and many properties that you may consider to be part of the household, including the home itself, vehicles, furniture, and more.

However, marital property also likely includes privately owned businesses and other properties owned in only one spouse’s name, provided that they were founded or acquired during the marriage. When you or your spouse have significant business assets, it is important that you understand how the division of property may work in your divorce.

Valuing Marital Business Assets in Illinois

If you have business assets that you want to protect in your divorce, you should first determine whether any of them may be excluded from the marital estate. Businesses that you owned prior to your marriage may be considered non-marital property, especially if they were designated as such in a prenuptial agreement. Businesses purchased with money from a gift or inheritance specifically in your name may also be considered non-marital assets.

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DuPage County divorce lawyer for retirement account divisionWhen you decide to get a divorce, you may be surprised to learn that retirement accounts, including IRAs, 401(k)s, and pensions, are usually considered marital property and are therefore subject to division, regardless of whose name the account is under. This can be especially challenging for older couples who have often accumulated significant savings and are planning to retire in the near future. In order to protect your retirement savings, it is important to hire an experienced attorney who can help you minimize losses during the divorce process.

Keeping Retirement Funds Safe During the Divorce Process

With the assistance of an attorney, there are several actions you can take to protect your retirement savings in the event of a divorce, including:

  • Establishing a prenuptial or postnuptial agreement: If you have significant retirement savings before getting married, it may be beneficial to create a prenuptial agreement with your partner that clarifies what will happen to those funds in a divorce. You can also modify your prenuptial agreement or create a postnuptial agreement during your marriage as your financial circumstances change.

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