Archive for the ‘Equitable Distribution’ 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.

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.

Basic Divorce Terminology

January 22nd, 2015 at 9:12 am

divorce terminology, Illinois divorce attorneyThose who are considering divorce, or have already filed for divorce, are faced with numerous legal terms that can be confusing or overwhelming. For example, in Illinois a divorce is not actually called a divorce; it is technically considered a “dissolution of marriage.” Speaking with an experienced divorce lawyer can help you understand all the terms and definitions you will need to know throughout your divorce proceedings.

If you are considering filing for a divorce, below are some basic legal terms you may want to know:

Dissolution of Marriage: A divorce. Illinois refers to divorce as a dissolution of marriage. It is the process a couple must go through to end their marriage. The process can be completed through traditional litigation in court or through mediation, but ultimately will conclude with the entry of a Judgment for Dissolution of Marriage.

Petition for Dissolution of Marriage: The document you will file with the court requesting  a divorce from your spouse. It will include basic information about your marriage and the grounds for the divorce.

Grounds: A specific reason for the divorce. In your petition for dissolution of marriage, you must state a legal reason for why you are seeking divorce. The grounds for divorce in Illinois are listed in the Illinois Marriage and Dissolution of Marriage Act, which include adultery, desertion, physical or mental cruelty, and irreconcilable differences.

Irreconcilable Differences: A general, “no-fault” divorce. When you allege these grounds in your Petition for Dissolution of Marriage, you are saying that you have tried (but failed) to work out your differences with your spouse and you cannot stay married any longer because it will not benefit either party.

Equitable Distribution: method of dividing assets in Illinois. This does not necessarily mean assets will be divided equally, but rather they will be divided fairly. A judge will consider different factors and divide the property among the two spouses as they see is the fairest in light of both parties’ circumstances.

Spousal Maintenance: Formerly known as alimony. Spousal maintenance is a court-ordered amount of financial support awarded to one spouse that the other spouse must pay. A judge can determine whether maintenance is appropriate in your case based on a variety of factors, such as income, assets, potential earning income, and the standard of living enjoyed during the marriage.

Legal terminology can be confusing when it is used in place of “everyday” language. If you need experienced legal counsel to help you file for divorce, contact our Chicago divorce lawyers. Anderson & Associates, P.C. can help you understand the terminology and legal process you will go through in divorce proceedings. Anderson & Associates, P.C. assists clients in Illinois from one of our five offices, conveniently located in Chicago, Schaumburg, Wheaton, Northbrook, and Orland Park. Call 312-345-9999 today.