Archive for the ‘division of property’ tag

Can a Business’ Retained Earnings Be Considered Marital Property?

April 23rd, 2015 at 2:54 pm

retained earnings, division of property, Chicago divorce attorneysIn short, yes. When a couple builds a business together during their marriage, both partners have the right to seek a portion of the business’ value during their divorce.

Retained earnings are the profits that a company makes which are not distributed back to its shareholders. They are the profits that are held onto in a reserve and used for specific goals, such as paying off company debts, or reinvested into the business.

Shares in a company can become a contentious topic among divorcing couples because of the prospect of retained earnings. Retained earnings contribute to a company’s overall value. Shareholders have an interest in these earnings and a say in how they are used. If the court determines that an individual’s shares in a company are marital property, their value must be divided among the spouses. If one’s shares are nonmarital property, the court must determine the spouses’ contribution to the company to determine a fair distribution of their value.

Illinois is an equitable distribution state, which means that property is not necessarily divided exactly 50/50 between divorcing parties. Instead, the division of a couple’s property is done according to a variety of factors, including each partner’s needs and personal resources.

Marital Property vs. Non-Marital Property

Generally, all property acquired during a couple’s marriage is presumed to be marital property. This includes the couple’s home, any joint bank accounts, and any businesses that the couple starts together. A business that one partner started before the marriage, but considerably expanded during the marriage with marital money, credit, or labor, may be also considered to be marital property.

When determining whether a company’s retained earnings may be considered to be marital property during a divorce, the following questions must be asked:

  • Are the retained earnings calculated as part of the company’s total value?
  • Are the retained earnings being used for corporate business?
  • How much control does the spouse involved in the business have to pay out the retained earnings as dividends to him or herself?

Whether other individuals are part owners or shareholders in the company and what the couple chooses to do with the business upon their divorce can also determine whether its retained earnings may be divided among the spouses. Some couples choose to sell their businesses and split the profit while others opt to continue them, either jointly or with one spouse buying out the other’s share of the company.

Divorce Attorneys in the Chicago Area

Anderson & Associates, P.C. is proud to serve clients throughout the Chicago area in our five accessible office locations: downtown Chicago, Orland Park, Northbrook, Schaumburg, and Wheaton. To discuss your unique circumstances, call 312-345-9999 to speak with one of the experienced Chicago divorce attorneys at our firm.

Older Couples Must Contend with Special Challenges in Divorce

April 22nd, 2015 at 5:48 pm

older divorce, older couple, Illinois divorce lawyerFor married couples with partners under the age of 50, the good news is that the U.S. divorce rate has been steadily decreasing since the 1980s. For couples who have passed the age 50 milestone, the bad news is that the divorce rate for their demographic is at its highest level ever. Recently, a recent study found that among divorcing couples over the age of 50, two-thirds of the divorce proceedings are initiated by the wife.

Societal Shifts and Longer Lifespans

Members of the Baby Boomer generation are divorcing at higher rates for a variety of social, cultural, and health related reasons. Compared to previous generations, divorce has simply become more common and more socially acceptable. Another reason is connected to longer lifespans. At age 50 or 60, many people are planning for a lengthy retirement and want to prioritize enjoying the last twenty to forty years of their life. This can result in them evaluating relationships with a more critical eye than people in generations past.

Increased Risk for Complicated and Litigious Divorces for Older Couples

When older couples initiate divorce proceedings, the size of their estate and issues surrounding retirement planning, accounts, and healthcare all may cause the process to be complicated and potentially very expensive. If the couple is not in agreement or able to work together with their attorneys to negotiate successfully, they are at risk for a litigious divorce proceeding. For older couples, this can be a dangerous scenario for people who are over 50 because, typically, their prime earning years are behind them. They simply will not have the ability or the opportunity to replace a great deal of the money spent on a protracted divorce.

Complex Estate and Retirement Issues

The issues of estate division involving retirement and pension plans, home equity, health insurance, and social security benefits all become critical and nuanced for couples over age 50. In many cases, the couples’ retirement planning was done under the assumption that they would be living as a married couple. In such cases it is not uncommon for the couple to discover that if they were to divide the estate, they simply don’t have enough assets for each spouse to afford retirement on their own.

Retirement accounts such as pension plans, 401(k) plans and Individual Retirement Accounts (IRAs) are generally regarded as marital property in a divorce. In addition to state divorce laws, there are federal guidelines that mandate how certain retirement plans are redistributed in divorce. Often times this will require specific types of orders to be entered to divide the accounts and it is important to have an experienced attorney  negotiate and draft these orders to ensure that your interests are protected.

If you are a member of the Baby Boomer generation who is considering a divorce, it is imperative that you consult with an experienced Chicago family law attorney at Anderson & Associates, P.C. to review your options. We are easily accessible at five convenient locations including offices in Wheaton, Orland Park, Northbrook, Schaumburg, and downtown Chicago. Please call 312-345-9999 to schedule your complimentary consultation today. We look forward to speaking with you.

Deciding Which Spouse Keeps the Family Home in a Divorce

April 10th, 2015 at 5:35 pm

family home, division of property, Illinois divorce attorneyDivorces are often fraught with uncertainty. Will I have to pay alimony? Who will get custody of the kids? Who gets to keep the house? During this difficult process, it is crucial that you keep yourself grounded and educated about how divorces work. Multiple factors play into which spouse keeps the family house after a divorce, if either spouse keeps it at all. In some cases, the couple is required to sell the house and split the proceeds.

If you want to keep your family home following your divorce, talk to your spouse about your desire and why it is important to you. If you choose to divorce through mediation or collaborative law, you will need to work with your spouse to develop a settlement that achieves both of your goals. After discussing your intention to keep the house with your spouse, the next step is to speak with an attorney about your rights, legal options, and how your case’s unique circumstances may affect your opportunity to keep your house.

The Family Home as Marital Property

The most important factor used to determine a house’s position and rightful ownership during a couple’s property division process is whether or not the house is considered to be marital property. Generally, marital property is any property that was purchased or significantly developed during the marriage. If you and your spouse purchased the home together after marrying, your home is marital property. Likewise, if either partner owned it prior to the marriage but the spouse made mortgage payments or significantly contributed to the home’s value through improvement projects after marrying, it may be considered to be marital property.

Under the Illinois Marriage and Dissolution of Marriage Act, Illinois is an equitable distribution state, which means that marital property is not necessarily split 50/50 during a divorce. Rather, it is divided between the spouses according to each partner’s contribution to the property during the marriage and their needs following the divorce.

Factors Considered When Determining Which Spouse Keeps the House

One of the most prominent factors considered when the court must determine which spouse keeps the family home is which spouse has primary custody of the couple’s children. If the court determines that it is in the children’s best interest to remain in the home and, by extension, their community and school district, the court may award the family home to the parent with whom the children will live most or all of the time. Sometimes, this award is temporary and the couple is required to sell the house once the youngest child turns 18.

Even if a spouse is awarded the home, that spouse may be required to buy out his or her former partner’s interest in the home. In some cases, the higher-earning spouse may be required to continue to pay for the home’s insurance or mortgage as part of a support arrangement. Either of these scenarios may be a possibility for you, depending on your current economic circumstances and your divorce’s details.

Chicago Divorce Attorneys

Call 312-345-9999 to schedule your free legal consultation with the skilled Chicago divorce attorneys at Anderson & Associates, P.C. to learn more about how the court may determine who keeps the family home in your divorce. We proudly serve our clients in five convenient locations: Wheaton, Orland Park, Northbrook, Schaumburg, and downtown Chicago.

Pursuing a Dissipation Claim Against Your Spouse

February 25th, 2015 at 9:42 am

dissipation claim, divorce lawyer in IllinoisThe division of marital property during a divorce proceeding is often contentious, particularly if the parties are disputing who gets which assets. Additional complications arise if one or both parties take steps to deplete those assets after the marriage has broken down.

When a couple is on the brink of divorce, one or both spouses might be tempted to spend marital assets to prevent the other from getting those assets in a divorce. This is called dissipation of marital property. Illinois law defines dissipation as a spouse’s use of marital or nonmarital property for his or her sole benefit for a purpose unrelated to the marriage after the marriage has begun to undergo an irretrievable breakdown.

Examples of dissipation include:

  • Buying gifts for a boyfriend or girlfriend;
  • Going on vacation with a boyfriend or girlfriend;
  • Excessive spending on gambling or lottery tickets;
  • Excessive spending on alcohol or other controlled substances;
  • Allowing the marital home or other real estate to fall into foreclosure; and
  • Failure to maintain marital property.

Claim Requirements

A spouse who wants to file a dissipation claim must do so 60 days before trial begins or 30 days after discovery closes, whichever date comes later. The spouse’s notice of intent must identify when the marriage underwent the irretrievable breakdown, the dissipated property, and when the dissipation occurred. If the party does not file a notice of intent within this timeframe, then any dissipation claims are waived.

Dissipation claims will not be successful if the spending was consistent with the lifestyle the couple established during the marriage. For example, if the alleged dissipater took a trip with the children during the divorce proceeding, and it is determined that the spouse took similar trips during the marriage then the claim is baseless. Furthermore, dissipation cannot be alleged if it occurred more than five years before the divorce petition was filed or three years after the party alleging dissipation knew or should have known about the dissipation.

Once a proper notice of intent to claim dissipation is file, the dissipating party has the burden to prove by clear and convincing evidence that the alleged dissipation did not occur. If the court determines that a dissipation claim is valid, it may compensate the wronged spouse. Typically this is done by offsetting the dissipated assets against the property awarded to the wasteful spouse in the judgment for dissolution of marriage.

Contact one of our Chicago divorce attorneys today if you suspect that your spouse is guilty of dissipation, or if your spouse files a dissipation claim against you. The timing and specifics of dissipation claims matter, and we will ensure that such claims are effectively pursued or defended. Anderson & Associates, P.C. has offices in Schaumburg, Wheaton, Northbrook, Orland Park and downtown Chicago.

Dividing Marital Assets During Divorce

February 6th, 2015 at 10:33 am

Illinois dividing assets, Chicago property division lawyerYou or your spouse has filed for divorce, and the question on your mind is: “Who gets what?” Most married couples bring assets into the marriage and accumulate additional property during the course of the marriage. Then, when a married couple separates, everything must be divided. The division of assets can be hard, and sometimes get heated, when divorcing couples do not agree with what the other should get.

It can be confusing to understand how assets are divided during divorce proceedings. Even if both parties agree the marriage is no longer working and to file for divorce, figuring out what is considered marital assets can be complicated. Illinois is an “equitable distribution” state, meaning the division of property and assets is not necessarily equal, but rather what is fair for both parties.

If the parties cannot agree on how their property will be divided, a judge will decide how to equitably divide the assets by analyzing several different factors. The length of marriage, value of all assets, what each party brought into the marriage, income and earning potential of each spouse, and standard of living during the marriage are just some of the factors that the court will examine. Dividing marital assets can be easy if neither person wants to keep anything and both parties agree to sell everything and split the profits. The situation gets more complicated if the parties can’t agree, or if the divorce involves intangible assets, which can make the proceedings take longer.

All property [houses, 401(k)s or pension plans, bank accounts, stocks, boats, cars, etc.] no matter how they are titled, can be considered marital assets if they were acquired during a marriage. Even if a house is titled in one party’s name, it can be considered marital property if it was bought during the marriage or if money from a joint account is used to pay for the mortgage, repairs, or upgrades. Classifying and dividing marital assets is not a straightforward process and can become overwhelming for many.

If you are considering filing for divorce, or your spouse has already filed for a divorce, contact one of our Chicago property division attorneys. Anderson & Associates, P.C., assists clients in Illinois from one of our five offices conveniently located in downtown Chicago, Schaumburg, Wheaton, Northbrook, and Orland Park. We are experienced in family law proceedings that range from simple to complex divorce. We can help you understand your next step.