In an ideal world, love would be all we need to be happily married; in real life, financial conflict can lead to serious problems in a marriage. Whether one spouse refuses to live within their means, does not pursue gainful employment, or consistently fails to pay monthly bills on time, differences in financial behaviors and opinion about how to manage finances leads to many divorces in Illinois.

In some situations, the financial problems a couple faces may leave them contemplating bankruptcy as they are simultaneously filing for divorce. Understanding how divorce and bankruptcy can influence each other is essential for making wise decisions about your finances now and setting yourself up for success in the future.

Can We File for Divorce and Bankruptcy at the Same Time?

While a couple can technically file for divorce at the same time as they file for bankruptcy, bankruptcy is a federal process that will take precedence over divorce. A bankruptcy court may require a couple to finalize their debt problems before they finalize their divorce, which could delay the divorce and make it more difficult to address personal issues between spouses that may be causing the financial problems to begin with. An Illinois judge may allow the parts of the divorce that are unrelated to finances to move forward, but the final divorce decree will not be handed down until the bankruptcy is complete.

Couples in Illinois who have worked hard to develop notable careers have also often accumulated substantial assets together. When a couple has liquid financial assets that are worth a million dollars or more, a couple can be considered high net worth. Spouses with a net worth of five million dollars are considered very high net worth while having over $30 million in assets earns a couple the distinction of being considered ultra-high net worth.

Whatever the exact value of a high-net-worth couple’s assets, there is no question that divorce becomes substantially more complicated when such a couple decides to separate. This blog discusses some of the unique challenges that these couples face during divorce.

A Longer Divorce Process

Unsurprisingly, larger and more complex financial assets contribute to a longer and more complex asset division process. The division of assets is notorious for being one of the toughest parts of a divorce, and especially when assets are difficult to value or when spouses cannot agree about how an asset should be divided. Inheritance, and the commingling of individually owned inheritance monies, can compound these problems. The same is true of spouses who attempt to hide marital assets.

While the marital asset division process in an Illinois divorce is fundamentally the same for everyone, couples or individuals with a high net worth have special considerations. Because high net worth assets are often complex, unique, or otherwise difficult to value, it is important to have the knowledge and assistance of a qualified Illinois divorce attorney and other financial professionals to help you throughout this process.

Are We Considered High Net Worth?

A person or couple’s “net worth” is the value of the assets they own, minus any debts or liabilities. The Securities Exchange Commission (SEC) is a governmental agency with the responsibility of ensuring fair market practices in the United States and the SEC defines a couple as being high net worth if their net worth exceeds one million dollars. A couple must also make over $300,000 a year in combined income.

Couples who have been working for many years may be surprised to find that they fall into the high net worth category, especially because this level of assets and income does not necessarily allow for a lavish lifestyle. Nevertheless, if you meet this threshold for high net worth, treat your divorce accordingly.

One of the greatest mistakes people make during their Illinois divorce is not planning for life after the divorce is over. Because many spouses are covered under their husband or wife’s employee health insurance, they may forget about dealing with health insurance and find themselves scrambling for coverage.

This is especially true for spouses who have been out of the workforce for many years because they are stay-at-home parents or homemakers. Private health insurance coverage can cost hundreds of dollars a month and divorcees may struggle to find a plan they can afford. Fortunately, Illinois has a law that allows individuals to continue receiving health insurance coverage from their former spouse’s plan following the divorce. Although this option does not last forever, it can be a good option for someone who would otherwise be uninsured.

How Can I Stay on My Spouse’s Insurance Plan?

Someone who wishes to remain on their former spouse’s insurance plan following a divorce must notify the spouse’s employer within 30 days of the final divorce decree. The insurance company will then send the non-employee spouse notification of continued coverage and other appropriate forms.

Divorce is already a complex and emotionally draining process, and this is especially true for someone whose spouse is frivolously spending the couple’s money before the divorce is finalized. Once that money is spent, it can be difficult, if not impossible, to get back.

In order to understand the legal remedies for victims whose spouses are recklessly spending marital money, or “dissipating marital assets”, it is important to understand what counts as dissipation of marital assets. Keep in mind that the best way to obtain a favorable outcome in cases involving dissipation is to hire an experienced divorce attorney.

What Is Dissipation of Marital Assets?

Spending by one spouse is likely to be considered dissipation if the spouse uses marital assets to buy things that: