In many divorce cases, the division of marital property is a challenging process. Both partners often feel that they have contributed significantly to the couple’s acquired assets and the marriage overall. As such, each partner may have particular needs or desires when the time comes to negotiate how the property will be distributed. For some, once the negotiation has resulted in a workable agreement, the marital assets are divided, each spouse receives his or her share, and the matter is permanently closed. Others, however, may not be so simple, sometimes requiring a long-term structured settlement to complete the process.
Property Division Basics
The laws in the state of Illinois require that marital property, assets, and debt be distributed equitably between divorcing spouses, and not necessarily evenly. In determining equitable distribution, the divorcing couple and the court must consider a number of circumstantial factors regarding the marital and financial situation. As prescribed by law, these considerations help create a clear picture of what each spouse should receive in the division process.
Property must also be valued so that there is some quantifiable measure of how assets and debt will be allocated. Some calculations are easier, such as valuing an automobile or a certificate of deposit, while others, such as a jointly owned business or the marital home, can be much more complicated.
Structured Settlements as an Option
Once value has been established for all marital property, the division process can be made difficult by the relative liquidity of the assets. When the marital property is easily valued and potentially convertible to cash, the distribution process can be handled quickly and fairly. However, the value of less liquid assets, in the form of real estate or business investments, may be much greater than the combined value of the remaining property. A spouse wishing to keep the marital home or buy out the other partner’s business interest, for instance, may find a structured settlement to be an attractive option.
As opposed to lump-sum payment, which a divorcing spouse may not have the resources to make, a structured settlement sets up a series of recurring payments over time to complete the equitable distribution of marital property. Interest is generally calculated and included, and only the interest is taxable, as the principal is considered marital property distribution.
As a simplified example, a couple may have approximately $1.5 million in marital assets, of which $1 million represents the properly appraised value of the couple’s home. For this example, it will be assumed that equitable distribution has been determined to be equal division, with each spouse receiving about $750,000 of the marital property. If the wife wishes to keep the home and agrees to allocate the remaining property to the husband, she may still be required to “buy out” his share of the home with $250,000 in structured payments.
Professional Property Division Representation
If you are considering divorce and would like to speak with a skilled lawyer about the details of Illinois division of property, contact an experienced Orland Park family law attorney. We offer a free initial consultation so that you can get the answers you need in deciding your next step. Call today or use our online form to schedule an appointment.