There 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.

In 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.

When 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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If you are not paying close attention to you and your spouse’s finances leading up to your divorce, during your divorce, and after your divorce, you might overlook hidden assets. It is important to keep an eye on your finances to be sure that you are receiving a fair and equitable divorce settlement. Never is this truer than during a complex divorce or a high-asset divorce. In other words, the more property and assets you have as a couple, the greater the likelihood that one or both of you might be hiding these assets. In order to be vigilant about potential hidden assets in your divorce, you need to be aware of some of the most common ways spouses can attempt to hide assets. 

5 Typical Ways Spouses Hide Assets

While some ways spouses hide assets are not very clever at all, many of them can actually be quite creative, so much so that to the untrained eye, they might make it through the divorce unnoticed. In that sense, you will want to hire a knowledgeable legal team, including a forensic accountant and maybe even a private investigator to verify all financial records. To help sharpen your hunches with regards to hidden assets, here are some typical ways spouses tend to hide assets during divorces:

1. Loans to Family and Friends — Your spouse might “lend” friends or family money with the secret understanding that such funds will be returned after the divorce is finalized.

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When two people elect to end their marriage through the divorce process, one of the most important issues that must be settled is how the couple will divide their marital property. If you are considering a divorce, you have probably considered questions such as, “Who will keep our home?” and, “Will I get a fair portion of our retirement savings?” In today’s world, however, more couples than ever before also have digital assets in addition to physical property, and it is important to know how digital assets are treated in a divorce.

What Are Digital Assets?

While the term “digital assets” may be unfamiliar to you, you probably own many things that would qualify as digital assets. Digital assets include e-books, electronically stored versions of songs, and downloadable content. Most digital property has no physical representation of the property in question. Consider, for example, music stored in your iTunes library or the apps on your smartphone. They do not exist anywhere else in the physical world, so they are classified as digital assets.