- BUSINESS VALUES and INCOME
If a spouse is an owner of a business established or acquired during the marriage, the business is marital property subject to equitable division. An initial measure of value can be determined from the business’s own tax returns. However, gross receipts, deductions, depreciation, compensation of officers and employees can all vary significantly leaving a true value of the business undeterminable from the taxes alone. There is much interpretation in the use of funds and deductions in a business, and how those uses can effect child support and maintenance. To get a true value of a business it may need a professional business valuation. The value of a business is different than its ability to generate income. Its value creates property settlement issues in a divorce, while its income is more of a child support and maintenance matter.
- CREDIT CARDS
If your spouse is a co-owner of credit cards then you are both liable to the credit card company for any charges. If your spouse is merely an authorized user, then only the owner is liable to the credit card company, despite who charged on the account.
A pension pays a monthly amount to a retiree upon retirement, usually for the life of that retiree. Pensions do not reflect a defined current sum of money. If a pension accrued during the marriage, the right to receive those pension payments upon the retirement of the retiree is marital property subject to division. The spouse without the pension is entitled to receive a portion of the monthly pension bound by the same rules and conditions as the pension holder. The spouse awarded a portion of the other’s pension will have to wait until the other is eligible for retirement before being able to receive benefits. Often, the entire pension is not marital property. A pension could have been growing for a few years prior to the marriage, in which case those amounts accrued and interest on those amounts should be considered non-marital property not subject to division. Similarly, if a divorce is final and the pension holder continues to work for many more years, those additional accruals represent non-marital property. The formula in a pension division includes the length of the marriage as a percentage of the total time the pension accrued.
- PERSONAL PROPERTY
Personal property includes clothing, furniture, appliances, electronics, photographs, firearms, tools, etc. Value is based upon current value, not purchase price. The court values personal property based on what a willing objective buyer would pay for the item. It is rarely economical to fight about the distribution of personal property. I do not want to bill $500 of your money in attorney fees fighting over something worth $400. Take digital photographs of all your personal property to preserve its location, condition, potential value. Photos will establish the fact that the property actually existed before it mysteriously disappears during the divorce. It is helpful to identify property in its current condition to avoid accusations regarding the location or value of that property. You should take pictures in every room including closets, attic, basement, garage etc. Presume that if you leave the home and leave behind personal property, you will never see that property again.
Photos are also helpful in geographically distant custody matters when mom and dad live far apart. Use www.ourchildinfo.com as a secure method to share photos of children and to comply with any Parenting Agreement communication requirements.
- PERSONAL PROPERTY VALUE and DIVISION
If the parties have acquired significant amounts of personal property through the marriage and are unable to agree on an equitable division or values, an appraisal for personal property may be necessary. The values of personal property is not the original cost or even retail value but, what I consider “garage sale” value. What was paid for the item has no relevance to its current value as a divisible marital asset. Considering that, make sure that the values of the personal property outweigh the time and fees that will be incurred in arriving at these final values.
- PROPERTY – MARITAL
Property acquired after the marriage becomes jointly owned marital property. Simply having one name on land, a house, a vehicle, or a retirement account does not effect the determination in Illinois as to whether or not that property is marital or non-marital. The only document that matters it is your marriage license, after the signatures on that document, all subsequent acquisitions are marital property. The goal in a dissolution to divide property equitably. Dividing it equitably does not mean dividing it equally. Factors unique to your situation could create an unequal distribution, but still an equitable one. When a particular piece of property or item was acquired will help determine its marital or non-marital status. It is possible for property to be part marital, and part non-marital. This is especially true of pensions that began to accrue before the marriage. That pre-marital accrual should be set aside and not subject to division.
- PROPERTY – NON-MARITAL
Non-marital property includes property acquired before the marriage and property acquired during the marriage by inheritance, gift, or excluded by a valid prenuptial agreement. Non-marital property is not to be divided as marital property in a dissolution. It should not be used as a factor in the calculation of an equal division of assets. However, courts can consider non-marital property in its equitable division of marital assets. Non-marital property can lose its status as non-marital if it is used for a marital purpose. For example, if you receive an inheritance of $10,000 during the marriage and use it to pay off marital debt or fix up the house, you have given that money to the marriage and it is no longer considered non-marital. Too maintain its non-marital status put that $10,000 into an individual account with your name on it and don’t touch it.
- PROPERTY – SENTIMENTAL
Photographs, family heirlooms, pre-marital collections, and family gifts are not as much an issue of value but more of the personal attachment they represent. Sentimental property should be secured immediately by the person who claims to have the greater sentimental attachment. If the property was acquired prior to the marriage, or was a gift during the marriage, it could be excluded in the division of marital property. Property should not be disposed until a final agreement or order.
- PROPERTY VALUE and DIVISION
Value of land or a home is usually the difference between its appraised value and the amount owed on it. If the property was acquired during the marriage, it is presumed to be marital property and then divided equitably between husband and wife.