Archive for the ‘property division’ tag

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.

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.

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.

Steps to Take Before Your Property Division Hearing

February 18th, 2015 at 8:58 pm

property division hearings, Illinois divorce law attorneyWhen a couple divorces, they dismantle the marriage they built together. One of the biggest components of this is the division of their marital property during the divorce process. Although it can be difficult to face your spouse in court or with a mediator to decide how you will split your home and possessions, it is a necessary part of any divorce. Consider the following tips to make this process easier for you.

Never Attempt to Hide Your Assets

Your spouse and his or her attorney have ways of discovering your assets, even if you attempt to hide them. No matter how you feel about your spouse or the asset itself, it is crucial that you maintain an open, honest communication with the court during the divorce process. Concealing assets will typically result in having to spend more money, time, and energy on your divorce and can result in significant penalties against you.

Know the Different Types of Property

Not all of your property is subject to division. Anything you obtained independently of your marriage, either through a gift, inheritance or due to owning the property prior to marrying your spouse, is considered to be nonmarital property. In the divorce, you should receive all of your nonmarital property.

Marital property includes anything you and your spouse acquired during the marriage or obtained or developed together. This can include your home, any vacation homes, bank or retirement accounts (regardless of whose name the account is in), stocks, and businesses. This is the property that the court will equitably divide during your divorce.

A third category of property, commingled property, includes assets that were originally marital or nonmarital property, but due to actions or events that happened during the marriage may have changed categories. This can be a complicated analysis and you should talk to your attorney about any property you have that may be considered to be commingled property.

Understand How the Property Division Process Works

Illinois is an equitable distribution state, which means that property is not necessarily divided 50/50 among divorcing couples. Instead, the court considers the divorcing couple’s unique circumstances in light of a list of factors to develop a fair division for them. Some examples of these factors are as follows:

  • Either partner’s financial obligation to a former spouse or child from a previous marriage;
  • Which partner is the custodial parent of a child;
  • Each partner’s current age and health;
  • Each partner’s current income;
  • Each partner’s potential for future income;
  • Whether either partner is receiving spousal maintenance;
  • Each partner’s contribution to the appreciation or depreciation of the marital property;
  • The duration of the couple’s marriage; and
  • The couple’s prenuptial agreement, if applicable.

The Illinois Marriage and Dissolution of Marriage Act includes the laws for dividing property among divorcing couples in Illinois. For some couples, all of the above factors are applicable. For others, only a few can be applied to their case. Talk to an attorney about the weight that each factor may carry in your property division hearing.

Contact a Divorce and Family Law Attorney 

If you are currently going through a divorce or considering filing for divorce in the near future, contact our Chicago, IL divorce lawyers to discuss your case with one of our experienced divorce attorneys. Anderson & Associates, P.C. understands the difficulties that all divorcing couples face and can help you through this process by providing you with compassionate, helpful legal advice and representation for your case. Contact us today to schedule an appointment at our offices in Schaumburg, Wheaton, Northbrook, Orland Park and 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.

Property Division Rules in Illinois Divorces

September 30th, 2013 at 11:21 am

Illinois has very specific property division laws.  The judges will follow these laws when dividing assets in a divorce, even if it results might seem unfair to one of the parties.  The goal of the court is to enter an order that “equitably” (or fairly) divides the marital property.  However, before doing this, the court must first determine which property is “marital” and which property is “nonmarital”.

RIgsIn Illinois, the courts will normally only divide the marital property between the parties.  Section 503 of the Illinois Marriage and Dissolution of Marriage Act defines what constitutes marital property.  The general rule is that property acquired by either spouse subsequent to the marriage is marital, and property acquired by a spouse prior to the marriage is that spouse’s nonmarital property – but there are plenty of exceptions to this general rule!  For instance, property that a spouse receives during the marriage might still be considered “nonmarital” if it was acquired as a gift or as an inheritance to that spouse.  It is important to note that property can be “marital” and subject to division by the court even if it is titled in only one spouse’s name.

The statutes and the mountain of case-law that lawyers and judges use for determining what is nonmarital, what is marital, and what factors to look at when deciding how to equitably divide the marital property are very complex.  Some of those factors include the length of the marriage, each party’s contribution to the marital estate, the economic circumstances of the parties, and whether one of the parties was responsible for any “dissipation” (spending or wasting marital property for a non-marital purpose).

Property division in a divorce case can be a hotly contested issue, in which case, a party should have an experienced Illinois family law attorney on their side to provide counsel and to represent his or her interests in court.