A person will likely experience many changes after getting a divorce. One spouse may move to a different city or state to get a fresh start. If children are involved, a parenting plan will be created to allocate parental responsibility and scheduled parenting time, among other things. Also, finances will be affected, since the spouses will no longer be sharing incomes. Another adjustment for a newly single person will be how he or she files taxes at the end of the year. An individual’s tax filing status will be different after a divorce, especially if children are involved. 

Filing Status

Depending on when the divorce is finalized will determine how a couple can file. If the divorce is final before December 31 at 11:59 p.m., each party must file their own individual tax return for that year. However, if the couple remains married at this time, they may choose whether to file taxes jointly or individually. A single person often can only claim one allowance, but a married couple has access to several. 

It is no secret that getting a divorce is expensive. Not only can you lose money in the process, but the time and energy required can also take a toll. A divorce can compromise your finances, so it is important to be smart about money during this time.

During divorce, marital property is divided between spouses, and this property includes all assets and debts acquired during the marriage. When property is divided between divorcing spouses in Illinois, this division should be done in a fair way. This is referred to as equitable distribution. However, each spouse's share of the assets is rarely equal, as decisions about the division of assets are based on many factors, such as the length of the marriage and the couple's standard of living. 

These days, it is more common for both parents in a household to hold a career while raising children together. However, having one parent stay at home to raise children is still a popular option for many families. This choice may be the personal preference of the homemaker, or a couple may find this option to be more financially feasible. Either way, for a stay-at-home parent, getting a divorce can be a difficult and nerve-wracking situation.

If you are a stay-at-home parent, you are likely the primary caregiver for your children. Although you may have had a career or job at one time, being a full-time stay-at-home parent has taken you out of the workplace. It may be necessary to go back to work after a divorce to support yourself and your children, but several post-divorce financial solutions may assist you with getting back on your feet financially.

The decision to divorce is difficult for any married couple. Whether it is losing the person you love, not seeing your children as often, or adapting to a new lifestyle, everyone has valid fears when the divorce process begins. Another common concern is about personal finances after you and your spouse split. If your spouse makes a significant amount of money, or if you do not have a college degree, giving up that financial support may feel hopeless.

Division of Assets

Unless you signed a prenuptial agreement before getting married, Illinois has a process when it comes to property and debt in a divorce called equitable division. While this does not mean that each spouse gets an equal share of marital property, the division of assets is done based on what is fair, while taking certain factors into consideration. How assets are divided are based on the length of a marriage, how much each spouse contributed to the marriage, economic and health circumstances, and whether children are involved. When it comes to physical property, premarital assets are usually left with the owner, and marital assets are included in the equitable division process.

The division of marital property is an essential part of the divorce process, but what some people forget is the division of debts. Whether credit cards, car loans, or student loans, it is important to take a close look at the debts that have accrued as a couple.

Every state has its own approach to dividing property, money, and debts. In Illinois, these are split according to what is equitable, not necessarily even, and takes various factors into account. Anything that is considered marital property can qualify for division. 

When two people get married, their financial situations change. The same is true in divorce. In Illinois, spouses who earn less money typically receive spousal maintenance (formerly known as spousal support or alimony). Here is a look at how spousal maintenance is calculated.

What Is Spousal Maintenance?

Spousal maintenance protects the individual in the marriage who makes less money and who would, therefore, be at an economic disadvantage in divorce. For example, one spouse may have stopped working to raise the family while the other maintained a high-paying career. Maintenance is meant to maintain the standard of living for both former partners. 

When signing a prenup agreement, it may feel like divorce is the inevitable conclusion, but if a couple gets divorced without one, the parties go to court to decide the division of assets if mutual decisions cannot be made. Signing a prenup before marriage addresses many issues a couple may face if divorce occurs, as long as no one tries to break the agreement.

What is a Prenuptial Agreement? 

A prenup is an agreement two people make before they are married, which settles financial and other arrangements in case the marriage fails. A person might suggest getting a prenuptial agreement if:

• He or she makes significantly more than the other partner.
• Both are business owners or entrepreneurs.
• One person has a high amount of debt.
• They have been married before and/or have children. 

Prenups are best known for protecting premarital assets. Without a prenup, the financial burdens of your spouse may become yours, even after divorce. They are also used to determine alimony. Because they are private agreements, prenup terms can be tied to how long a marriage lasts. Clauses can be added such as a confidentiality to protect the details of your divorce or marriage from publication. 

When a married couple decides to get a divorce, their assets will be divided between them. In Illinois, this can be done between the two parties out of court, but if an agreement cannot be reached, then the court steps in with a system called equitable distribution. This system intends to divide properly fairly, but it does not mean that all assets are divided equally. Some of the factors used to determine how to divide marital property include:

• The distribution of wealth
• The length of the marriage
• The couple’s standard of living
• Future parental responsibility 
• The health, income, and age of the individuals 

With these factors, it is still important to take action before your divorce to protect yourself financially, because the outcomes of these decisions are often uncertain. 

Know Your Finances

Before the divorce process begins, it will help to learn as much as you can about your personal finances. Begin tracking how much you earn, how much you spend, and any future expenses. Start creating a budget focused around necessities such as food, shelter, and medical care for yourself and your children. Use previous statements, bank records, and records of expenses to plan for the future. All of this information will not only help you, but it can be used to demonstrate your financial needs to the court when dividing marital property. 

One of the most common things people worry about when they are going through a divorce is how it will affect their finances, and for good reason. According to a study conducted by the U.S. Government Accountability Office, women experienced a significant drop in their income after divorce--nearly 41 percent, on average. This can be due to a number of factors, but there are dozens of mistakes you can make when getting a divorce that could negatively impact your finances. Here are some common mistakes you should be sure to avoid:

1. Not Being Prepared

One of the most common mistakes that people make with their finances during divorce is not being prepared for the divorce itself. Divorce is a long and demanding process, so being prepared is crucial. Before you begin the process, you should consult with both financial experts and an experienced attorney to make sure you are making the best decisions.

Getting a divorce is a challenging time in many adults’ lives. Not only are there things to settle financially and assets to divide, divorce brings much emotional confusion into the picture. Once you have decided that a divorce is your best option, you should become prepared for the long and winding journey that is the divorce process. These 8 things can help you get a head start on your divorce even before the legal process gets started:

1. Determine the Type of Divorce You Want

Often, people think that a divorce is a divorce. In reality, there are many different types of divorce. In Illinois, the types of divorce recognized are:

The end of your marriage is likely to be a traumatic, chaotic time, but taking the time to prepare for your life after divorce will help you begin the next phase of your life on the right foot. One of the key concerns you should address is your finances, making sure that the decisions made during divorce will protect your financial security and ensure that you will be able to provide for yourself and your family. Here are some tips for financial planning during divorce:

• Gather documents - Be sure to obtain complete records that will give you the full picture of your and your spouse’s finances. These documents may include bank statements, credit card accounts, retirement accounts, investments, mortgages, automobile loans, pay stubs, tax returns, and appraisals of items you own. Fully understanding your financial situation will ensure that assets and debts are divided equitably, and it may help identify any hidden assets.
• Avoid hasty decisions - It can be easy to make decisions based on emotion during divorce (for instance, one spouse may insist on ownership of real estate because they have an attachment to the marital home), but it is best to take a step back and consider things rationally, ensuring that you are making the right choices to protect your financial interests. It is also a good idea to wait to make any big purchases or changes to your life that may affect your finances.
• Create a budget - Finances can be strained following divorce, so you will want to be sure to fully understand your income and expenses and prepare for a lifestyle that will meet your family’s needs without causing you to go into debt. If possible, leave yourself some room for flexibility, in case you experience any unanticipated expenses.
• Speak to a financial advisor - The financial issues that arise during divorce can be complex. An accountant or financial analyst can help you understand the full ramifications of your decisions, including the tax consequences of property division and the best steps to take to protect your financial health.

Contact a Schaumburg Divorce Attorney

Divorce does not have to mean financial ruin or mountains of debt. If you need help reaching a resolution to your divorce that protects your financial security, the skilled attorneys at Anderson and Associates, P.C. can work with you to negotiate a settlement that meets your needs. Contact our Arlington Heights divorce lawyers today at 847-995-9999 to set up a free consultation.

The major life changes that accompany the end of a marriage can be overwhelming, even in the most amicable breakups. Whether you have made the mutual decision to move on from a relationship that is no longer working or have been unexpectedly served with divorce papers, you are likely not fully prepared for the upheaval that divorce will bring to your life. But while divorce can be stressful and full of complicated emotions, you can complete the process more efficiently and effectively by taking the following steps:

1. Manage your expectations - Your divorce will require some major changes to nearly every aspect of your life, from your finances, to your living situation, to your relationship with family and friends. When you are realistic about what you expect your post-divorce life to look like, you can then set goals for what you want to accomplish and work toward them throughout the divorce process.

2. Be honest - Divorce is a personal process, and it can require people to “air dirty laundry” in a public forum, which can be embarrassing. However, trying to hide information from an attorney or judge can have consequences, especially if you are trying to conceal income or assets that you do not think you should have to share with your ex-spouse. Being as open and honest as possible will ensure that fair decisions are made during your divorce.

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When a couple ends their marriage in divorce, the process of separating their lives from each other can be a lengthy, difficult process. Determining how to divide physical property, financial assets, and debts can be a complex matter, and when one or both spouses own a business, this process can become even more complicated.

Spouses who are business owners often have many of their mutual financial assets tied up in the business, making it difficult to divide these assets while keeping the business intact. Taking the following measures can help you ensure that your family-owned business will survive your divorce and that you will be able to maintain financial stability:

• Consider a prenuptial or postnuptial agreement - If you owned a business prior to your marriage, a prenuptial agreement can specify that you will retain ownership in the case of divorce. For a business that was formed after your marriage, a postnuptial agreement can define how ownership will be handled after divorce.

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When your marriage is ending, your life will likely be thrown into chaos as you and your spouse work to separate the many aspects of your lives which have become closely linked over the years of your partnership. During divorce, it is important to understand how your finances will be affected and plan for how you will manage your ongoing budget.

Consider the following tips to get on the right financial foot during divorce proceedings and after your divorce has been finalized:

1. Create a budget - You should make sure you have a full understanding of your income and expenses, including any spousal maintenance or child support payments you pay or receive after the divorce. Additionally, be sure you are accounting for rent, utilities, groceries, credit card bills, vehicle maintenance costs, insurance, and child care costs. Setting everything down in a budget and planning month to month management will ensure that unexpected costs do not arise and cause problems in the future.

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