Archive for the ‘divorce’ 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.

Heavy Social Media Use Linked to Divorce Rates

April 14th, 2015 at 6:30 pm

social media, divorce rate, Illinois divorce lawyerCould your constant Facebook posting, Twitter use, and other social media posting be cause for concern in your marriage? A new study says it can and shows a correlation between social media use and divorce. The cause for divorce is not the use of social media, but rather those who use social media more than those who do not are more likely to get a divorce.

The researchers compared data collected about married couples from 2008 through 2010 with data from a 2011 study of married couples. The growth of Facebook and other social media sites were found to be correlated to the rise in divorce rates during the same time periods.

According to Boston University’s director of the Division of Emerging Media Studies, James E. Katz, “the apparent association between the use of Facebook and other social networking sites and divorce and marital unhappiness in the United States raises troubling questions not only about how we use these tools, but how their use affects marriage.”

Stopping the Social Media Use Conflict

When it comes to social media use and marriage, if someone is unhappy in their marriage, it is easy to see why they may turn to social media and become immersed in social media. They make connections on Facebook, Twitter, or other social media sites. The friends they have on those sites are supportive and listen. They can give encouragement and lend a virtual shoulder to cry on.

Turning to those virtual friends, which sometimes leads to real-life friendships, does not always help mend the problems in the marriage. It can turn into an serious problem, though. Spending more time on social media and interacting on social media sites may have characteristics similar to other behaviors that may cause marital conflict. Continual heavy usage of social media and not communicating with your spouse may lead to divorce.

If your spouse is spending more time on social media sites than they are communicating with you, you may start feeling resentful and unhappy in your marriage. If you are considering filing for divorce, you should speak with an experienced Chicago divorce attorney. Anderson & Associates, P.C. assists clients in Illinois from one of our five offices, conveniently located in Chicago, Schaumburg, Wheaton, Northbrook, and Orland Park.

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.

Ways to Make a Divorce Less Stressful

April 7th, 2015 at 2:47 pm

less stressful, divorce, Chicago divorce attorneyMany people think going through a divorce is stressful and all about fighting to get what you want from your soon-to-be ex-spouse. However, this does not necessarily need to be the case. There are many couples who have gone through the divorce process without excessive stress or contentiousness. Some ways to make a divorce less stressful are:

Be Willing to Talk

When a petition for a divorce is filed, one party may feel betrayed and become hurt or angry. Completing a divorce, however, often requires negotiation and communication regarding a number of relevant issues. If you are not able to speak with your spouse, you can have your divorce attorney communicate with your spouse or his or her attorney to try to reach agreements during the divorce process.

Remain Civil

Especially if you have children, staying polite with your spouse can make the process considerably less stressful. It can also help during negotiations and while speaking in front of the court. Avoiding negativity and angry or harsh words with your soon-to-be ex-spouse may help you keep a better relationship with your children. It also demonstrates to your children that you do not wish for them to be caught in the middle.

Consider Mediation or Collaborative Law

If you are able to negotiate with your spouse, speaking with a certified mediator or collaborative law attorney may be the way to save some time and money in your divorce process. Mediation takes place with help of a neutral third party mediator, with lawyers present only if necessary or appropriate. Collaborative law generally requires parties to have an attorney, but is a lower stress alternative to courtroom litigation. Both options look to save the parties time and money while helping them to reach agreements with each other. It also allows both parties more control over the eventual divorce agreement rather than leaving it up to a judge.

Know What You Have and Its Worth

Whether it is real estate, physical property, or other assets, be aware of what you have and its value. It is also helpful to know exactly what debts you owe individually and with your spouse. In some cases, one party may have hidden assets, not necessarily because one party did not inform the other of the purchase, but because some assets are undervalued. You will want to make a list of all assets you had before the marriage and what was acquired during the marriage. This will make the division of property, assets, and debt much easier. Illinois is an “equitable-distribution” state, meaning that marital property, assets, and debt are not divided equally, but rather fairly as determined by the court. Staying organized and knowing what you own,how much it is worth, and how much debt you have will help make this process less stressful.

Help In Making Your Divorce Less Stressful

An estimated 33,000 marriages come to an end in Illinois every year,  and not all of the couples went through a long, stressful divorce. Many people were able to keep the divorce-related stress to a minimum by speaking with an experienced divorce attorney they trusted to work in their best interest.

If you are considering filing for divorce or your spouse has already filed for divorce, you should contact a skilled Chicago family law attorney. The lawyers at Anderson & Associates, P.C. can help you understand the divorce process, help you understand your divorce options, and will work with you to achieve your goals. Anderson & Associates, P.C. assists clients in Illinois from one of our five offices, conveniently located in Chicago, Schaumburg, Wheaton, Northbrook, and Orland Park.

Repairing Your Credit Score after a Divorce

March 24th, 2015 at 6:20 pm

credit score, divorce finances, Chicago Family Law AttorneysA divorce can certainly take a toll on a person emotionally, but it can also wreak havoc on a person’s finances. For instance, your household income may be going from two people working to just a single income. It is also often the case, especially in contentious breakups, that one spouse refuses to pay their share of the bills while the divorce is ongoing. This can result not only in your bank account taking a hit, but your credit score may also be greatly affected. Even in a “friendly” divorce, many people find their credit rating has taken a nose dive. Financial advisors say there are steps you can take which will help repair and rebuild your credit after divorce.

When it comes to repairing your credit after a divorce, the first step one should take is finding out exactly where their credit score stands. This can be done by pulling credit reports from each of the three major credit bureaus. Federal law entitles you to receive a free report every year. Carefully examine the reports to find any and all accounts that are in your name, either solely or jointly. Unfortunately, it is not uncommon for one spouse to take out credit cards in their spouse’s name without their knowledge – especially in a troubled marriage –  and these accounts can have a negative effect on one’s credit score.

Close out accounts held jointly with your ex-spouse, and open accounts in your name only. The closing of accounts may cause your credit score to dip initially, but it will go back up again once you begin reestablishing credit in your name alone. You should also contact your current credit card companies and let them know you are now divorced. Inquire whether or not they will issue you a new credit card account in your name only. It is also important to have your name removed from accounts where you are listed as an authorized user.

When it comes to paying bills which are in your name alone, as you are trying to rebuild your credit, financial advisors recommend that you prioritize payment of your bills in the following order:

  1. Mortgage, car loans, and other installment loan debts and credit cards;
  2. Rental payments for apartment or house; and
  3. Utilities.

For bills which are still in both your name and your ex-spouse’s name, the priority should be:

  1. Payment for the vehicle you use;
  2. Mortgage or rent for the place where you live;
  3. Utilities; and
  4. Installment loans and credit cards.

During the divorce process, it is important to keep your attorney informed of any issues that surface regarding martial finances as you are going through the divorce. If your spouse is supposed to pay a share of the bills and refuses, your attorney will know what legal options you have – such as requesting a hearing where the court can order your spouse to make the payments.

If you are considering a divorce, contact an experienced Chicago divorce attorney to discuss your case.  Anderson & Associates, P.C. has offices in Schaumburg, Wheaton, Northbrook, Orland Park and downtown Chicago.

Determining Pet Custody in a Divorce

March 17th, 2015 at 2:00 pm

pet custody, divorce, Chicago divorce attorneysWhen a couple opts to end their marriage through divorce, the next step is to work with the court to divide their property and determine custody and support arrangements for their children if they have any. Today, however, as beloved pets are often considered to be a part of the family, many couples express concerns about custody of their companion animals following their divorces. 

Legally, pets are personal property in Illinois. Emotional attachment does not preclude domestic pets such as cats and dogs from being included in the Illinois Marriage and Dissolution of Marriage Act as items to divide during a divorce proceeding.

However, some couples choose to negotiate their own pet custody agreements. These are not necessarily enforceable in court, but can give the couple an outline to work with regarding their pet’s care after their divorce. When the spouses do not have such an amicable relationship but both want to retain custody of their pet, each partner may need to argue their fitness to keep the pet to the court.

Proving Your Fitness to Keep Your Pet

You might have to prove your fitness as a pet owner to have your pet’s custody awarded to you during your divorce. Some of the ways you can do this are:

  • Showing your financial investment in the pet through receipts for its veterinary bills, food costs, and any other pet bills like grooming services or obedience classes.
  • Demonstrating to the court that your home is better suited for a pet than your former partner’s. This may be because you have a large yard for the pet to roam or your former partner’s apartment does not allow pets.
  • Proving your bond with the pet through activities such as hunting or agility competitions.

Your attorney can help you develop a strong case for having your pet after a divorce. If you are your children’s custodial parent, this may also help your case for keeping your pet.

Sharing Pet Custody

With no law that outlines pet custody in Illinois, some couples choose to develop shared pet custody arrangements. In many cases, these arrangements are modeled on the couple’s child custody arrangement – wherever the children go, the pet goes. Talk to your spouse about this option and determine if setting up a visitation schedule could be a viable choice for your situation.

Although they can not speak or express themselves the way humans can, animals feel tension and stress during a divorce. No matter what you and your spouse decide, it is important for your pet’s health that you do all you can to minimize the stress that he or she is put through during the divorce process.

Divorce Attorneys in Chicago

If you are considering ending your marriage or you are currently working through the divorce process, contact the skilled Chicago divorce attorneys at Anderson & Associates, P.C. at 312-345-9999 or online for your initial legal consultation with our firm. We have five convenient offices in the Chicago area: Northbrook, Wheaton, Orland Park, Schaumburg, and downtown Chicago.

Be Wary of Hidden Assets in Divorce

March 13th, 2015 at 8:00 am

hidden assets, division of property, Chicago family law attorneysWhen a couple has reached the end of their marriage and divorce is imminent, both spouses are not often equally prepared. Frequently, the partner with more financial control has begun to plan to for the future and, in some cases, may be taking steps to manipulate asset valuation so as to individually benefit when property is divided in the impending divorce. Although undervalued or hidden assets may be more common among wealthier divorcing couples, lower net-worth families can be affected as much or more by the deceptive and illegal practice.

Who Hides Assets?

Few married couples share responsibility for the family’s finances equally. In many situations, one spouse is responsible for the household budget by paying bills, managing investments, and making all or most major financial decisions. He or she typically maintains unfettered access to all joint accounts and monetary resources. The partner with control of the family’s money is often the one with most opportunity and temptation to use the situation to his or her advantage. However, if the spouse tasked with financial responsibility is not the primary wage-earner, the spouse with the higher income may be inclined to keep assets and resources away from joint accounts, while putting money aside for the post-divorce future.

Where to Find Hidden Assets

While those who hide assets typically do so for one reason – affecting the division of property to his or own benefit – the methods used may differ greatly depending on the situation. Financial experts, however, have identified several of the most common ways a partner may attempt to hide marital assets:

  • Easily Undervalued Purchases: New artwork for her home office or parts for the classic car he is restoring may be more valuable than they seem.
  • Reporting Lower Income at Tax Time: Despite the risk of an IRS audit and subsequent penalties, only officially reported income is used in most financial analyses.
  • Paying More at Tax Time: An intentional overpayment to the IRS or other creditors may be recovered at a later date, presumably to be refunded after completion of the divorce proceedings.
  • Investment Transfers: Stock accounts may be transferred to relatives, business associates, or dummy companies, again, to be recovered later.
  • Physical Hidden Cash: Sometimes, hiding assets may be as simple as putting cash in safety deposit box or under the bed in a shoebox.

Help in Uncovering Hidden Assets

There are countless ways in which a determined individual can try to affect the outcome of property and asset division in divorce. With the rise of digital technology, it has become much more difficult, though, to keep hidden assets from being discovered by legal and financial professionals. Forensic accountants are specifically trained to identify and quantify irregularities in financial records, and in conjunction with a qualified lawyer, can provide invaluable assistance to many complex divorce situations.

If you have reason to believe your spouse has been hiding assets and a divorce seems imminent, our team is ready to go to work for you. Contact an experienced Illinois property division attorney today at Anderson & Associates, P.C. We offer convenient office locations in Schaumburg, Wheaton, Northbrook, Orland Park, and downtown Chicago.

Study Finds Lower Divorce Rate for Doctors, Medical Professionals

March 12th, 2015 at 7:00 am

divorce rate, divorce among doctors, Illinois Family Law AttorneyA career in the medical field presents a large number of both professional and personal challenges. Doctors, nurses, and healthcare administrators often spend long hours focused on the needs of the patients in their care. Considering the demanding schedule and the high-stress environment in which many medical professionals work, it is not unusual for family life to be directly affected. In fact, it would be reasonable to assume that the strain a healthcare career can place on a marriage might, overall, lead to a higher divorce rate. A new study, however, seems to suggest that such an assumption would be wrong.

A team of researchers led by Dr. Dan Ly, medical resident at Massachusetts General Hospital, released its findings last month in a report published in the journal BMJ. “It’s been speculated that doctors are more likely to be divorced than other professionals because of the long hours they keep and the stress associated with the job,” senior author of the study, Anupam Jena, M.D, said in a statement, “but no large-scale study has ever investigated whether that is true.”

Dr. Jena, a physician at Mass General and assistant professor at Harvard Medical School, found that the idea that physicians are likely to divorce is prevalent even among doctors themselves. To find out, the team examined data taken from the American Community Survey, an ongoing demographic survey conducted the U.S. Census Bureau. The research looked at more than 6.5 million individuals, including a quarter million doctors, dentists, nurses, pharmacists, and healthcare executives.

Controlling for age and income, the team discovered that physicians divorce at a rate of about 24 percent, second-lowest among the studied groups. Pharmacists enjoy the lowest rate at 23 percent, while dentists have a 25 percent likelihood of divorce. Executives and nurses were slightly higher at 31 percent and 33 percent, respectively, but all of the  healthcare professionals were found less likely to divorce than non-healthcare workers, who carry a 35 percent divorce rate.

The findings also indicated that a female doctor was much more likely to divorce than a male doctor, especially if she worked more than 40 hours per week. Dr. Jena speculated the gender disparity may be rooted in the common expectations placed on women in regard to work and family balance. “Females traditionally bear more of the household and child-rearing responsibilities on average, and female physicians, if they have to do both that and maintain a job as a physician, that could lead to a lot stress and lead to higher rates of divorce,” he said.

Doctors and medical professionals, Dr. Jena concluded, should not worry about a high rate of divorce due to job-related stress. Female doctors, however, should be aware of the impact that balancing work and family life may be having on their relationships.

Whether you are a doctor, nurse, or dentist, or if your job is completely unrelated to healthcare, divorce can be a challenging process. With many decisions to make and factors to consider, a qualified divorce attorney can provide the help you deserve. Contact the experienced Illinois family law attorneys at Anderson & Associates, P.C. today. We have offices conveniently located in downtown Chicago, Schaumburg, Wheaton, Orland, Park, and Northbrook to meet your legal needs.

Business Valuation in a Divorce

March 11th, 2015 at 4:00 pm

property division, assets, Illinois Divorce AttorneyMany Illinois couples choose to work together to open and operate businesses. In other marriages, one partner operates his or her own business with little to no input from his or her spouse. When a business is a part of a couple’s household income, it must be accounted for during their divorce.

The amount of personal investment each partner has in a business can determine how it is divided during the couple’s divorce. Illinois is an equitable distribution state, which means that divorcing couples’ assets are divided after considering several factors, including each partner’s needs and contribution to the marriage, rather than simply splitting their entire asset network in half.

Valuing a Business during a Divorce

A business, like other marital assets, must be assigned a monetary value to be divided as part of a couple’s divorce judgment. There are a few different methods used to determine a business’ monetary value. The method that is best for an individual business depends on the type of business and the couple’s plans for the business after their divorce.

The market approach values a business by comparing it to similar businesses to determine its viability and future prospects. Issues like the business’ relationship with its clients and its role in the community are considered when making this determination. This option is usually the best choice for couples who choose to sell their businesses.

The income approach looks at a business’ current and projected earnings to determine its value. Potential for growth, as well as any depreciation that can occur, are factored into the income approach. Results from this type of analysis are likely to factored into child support of spousal maintenance considerations.

The asset approach values a business by subtracting its depreciation from the total of its assets. This is a straightforward approach that can sometimes be too narrow for larger or more complicated businesses. If one owned the business prior to the marriage and liquidation was likely, this approach could be used to calculate the amount of marital property, if any, was invested during the marriage.

The correct valuation approach for many businesses may actually be a combination of all three, allowing for a larger number of factors. Financial experts commonly incorporate a number of methods when establishing the value of business, particularly in more complex situations.

Options for Divorcing Business Owners

There are some situations in which neither partner wants to leave the business. A couple with a fairly amicable relationship may choose to continue operating the business together after their divorce. In such cases, each partner’s interest in the company must be evaluated and written into a new contract reflecting their stakes as individual assets rather than a marital asset. Other options include selling the business or one partner choosing to continue to operate the business alone after the divorce.

All entrepreneurs are encouraged to draft prenuptial or postnuptial agreements that include their plans for their businesses in the event of a divorce. A prenuptial or postnuptial agreement can make it much easier to protect one’s interests during the divorce process, especially if these interests were obtained before the marriage and remained largely within the individual’s sole control during the marriage.

Chicago Divorce Attorneys

If you are a business owner currently going through a divorce, call 312-345-9999 to schedule your free legal consultation with Anderson & Associates, P.C. at one of our five convenient locations in the Chicago area. With offices in Wheaton, Orland Park, Northbrook, Schaumburg, and downtown Chicago, we work with our clients to determine the best course of action for their divorces. Do not wait to start working with an experienced Chicago divorce attorney – give us a call today to learn more about your options and obligations as a business owner.