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Do Not Let Your Divorce Destroy Your Credit
Ending a marriage is undoubtedly one of the most emotionally draining situations many people have to face. At this difficult time, it is vitally important to be aware of the negative impact this emotional upheaval can have on personal finances. While working through your separation and divorce settlement process, it is necessary to take proactive responsibility for safeguarding your personal finances and credit score.
Good Credit Is Crucial
For spouses who have not been responsible for bill-paying in the marriage, the transition to successfully managing their personal finances can be challenging. At our firm, we work with our clients to get an overall understanding of their finances so we can help them make smart decisions going forward. One important area of focus involves the personal credit score. Everyone has their own credit score assigned to them by the credit reporting agencies, regardless of if they are single or married. However, for married people, depending on how the couple’s credit and loan accounts were set-up and administered, their individual credit scores may be substantially different.
How Is Marital Debt Handled in an Illinois Divorce?
Couples choose to end their marriage for many reasons, including financial problems. Perhaps you were a saver and your spouse was a spender, which caused many arguments or conflicts. Regardless of why you have decided that divorce is your best option, there are many issues you and your spouse will have to resolve before you can legally dissolve your union. Your first thought may be how to divide up your assets and property. However, it is important to remember that any marital debt will also need to be divided before you can finalize your divorce in Illinois.
Debt Allocation in Illinois
When it comes to dividing marital assets, Illinois is an equitable distribution state. This means that each spouse will be allocated a fair amount of the marital estate, including both property and debt. The first step in determining who will be responsible for what is figuring out which assets or debts are part of the marital estate and which ones are considered personal debts. According to the Illinois Marriage and Dissolution of Marriage Act (IMDMA), any property or debts that you and your spouse acquired after your wedding day and before the day you filed for divorce are included in the marital estate. If the debt was accumulated before you got married or after you filed for divorce, it is usually considered individual debt.
What Factors Can Make an Illinois Prenuptial Agreement Invalid?
When people get married, the traditional vows state that the union is ‘til death do us part. Unfortunately, not all couples live happily ever after. Whether the relationship fails due to outside influences or addictions, or the partners simply grow apart, a divorce may be the best option for everyone involved. During the divorce process in Illinois, a couple must decide how to divide their property and assets. This may be especially important if there is a family-owned business or other high-net-worth assets at stake. If the couple had a prenuptial agreement (prenup) in place, these determinations may already be made, making the marriage dissolution process much easier and faster. However, there are certain factors that can make a prenuptial agreement invalid in Illinois, so it is important to avoid making a mistake when creating this legal document.
Illinois Uniform Premarital Agreement Act
The Illinois Uniform Premarital Agreement Act governs all prenuptial agreements. In order to be legally binding, a prenup must be put in writing and signed by both spouses. If a couple decides not to get married, any premarital agreement they made is voided. Prior to signing a prenup, both parties should disclose all of their financial information to each other, including their income, any property they own, and outstanding debts.
How Has COVID-19 Affected Co-Parenting in Illinois Divorce Cases?
After a couple finalizes a divorce, they can often go their own separate ways, never having to see each other again. However, if children are involved, they will be co-parenting together. This can be difficult under any circumstances, but even more so during a global health crisis like COVID-19. In an effort to stop the spread of the contagious virus, many non-essential businesses have been closed, while students have been learning remotely and parents working from their homes. Navigating this new normal presents different challenges for co-parents. This means some divorced parents may need to modify their existing co-parenting arrangements or parenting time orders.
Co-Parenting and Parenting Time Schedules
In Illinois divorces, parents must create a parenting plan that outlines how parental responsibilities (child custody) and parenting time (visitation) will be shared or divided. If spouses cannot agree to the terms of this plan before their divorce is finalized, the court will become involved. In these cases, a judge will make decisions on what is in the best interest of the children. Arrangements can be tailored to fit parents’ work schedules as well as children’s school schedules. Sharing may be in the form of one parent having the kids stay with him or her for one week, then the other parent having the kids the next week. In other situations, one parent may have the majority of parenting time with the co-parent only having the children every other weekend and one night a week.
How Holiday Gift-Giving Can Help Reduce Your Estate Taxes
Even though it is the season for giving, this year has been difficult for many people due to the COVID-19 pandemic. Coronavirus has resulted in not only a global health crisis but an economic downturn as well. Numerous individuals across the country may have felt the impact, whether it is a pay cut or a job loss. Many people may be contemplating their financial future, regardless of their job status. Tax issues can be complex, but there are various ways to reduce estate and inheritance taxes. For instance, Illinois tax laws provide tax benefits if retirement funds are left to designated individuals, and certain kinds of trusts can reduce estate and inheritance taxes that an individual has to pay. There are valuable tools that can be utilized in the estate planning process, and an experienced attorney can assist you in creating a comprehensive estate plan.
Monetary Gifts at the End of the Year
These days, many individuals are now doing their Christmas shopping online as a result of COVID-19. Stores all over the country are temporarily closed in an effort to stop the spread of the contagious virus. For those who have a difficult time picking out the perfect gift, a good alternative is to give money. That way, the recipient can buy whatever he or she likes. Giving money to family members or friends this Christmas can also be a smart tax planning move. Gifting cash now can help you reduce or even avoid estate taxes after you die.
Understanding the Risks in a "For Sale by Owner" Real Estate Purchase
There are a number of reasons that you may want to purchase a home that is being sold by the owner. It could be that the property has everything you have been looking for, or it could simply be a desire to complete an expedient purchase. Whatever the case, there are some risks that you should be aware of, and some factors you should consider, when purchasing a "for sale by owner" (FSBO) property. These risks and factors - and how you can effectively manage them - could prove to be crucial.
You May Have to Do Some Leg Work
Real estate agents are paid (and trained) to address many details for both the buyer and the seller. A FSBO owner, though interested in selling their property, does not have the same knowledge or experience, which means they may fail to provide you with important information. This oversight may not necessarily be intentional, but it is something you should be aware of. Furthermore, FSBO owners may lack the organizational skills needed to complete paperwork in a timely manner.
Who Should I Choose to Be My Power of Attorney?
Have you ever thought about who should handle your affairs if you became physically or mentally capacitated? Sadly, unexpected accidents and illnesses can affect even individuals who are otherwise young and healthy. A power of attorney is a type of advance directive that allows a person to designate a representative or “agent” to speak on his or her behalf in the event of a catastrophic illness or injury. The term “power of attorney” is used to refer to the estate planning tool as well as the individual who is chosen to act as the agent. This is a heavy responsibility, so it is important to choose someone who is capable of handling the role.
Financial Power of Attorney and Power of Attorney for Healthcare
A power of attorney for healthcare, also called a medical power of attorney, allows you to choose a representative to make medical decisions on your behalf should you become unable to express your own medical wishes. For example, if complications arise during surgery and you are under anesthesia, your power of attorney for healthcare may need to make decisions on your behalf about how to proceed.
What Should Small Business Owners Know About Succession Planning?
Succession planning refers to passing on ownership or leadership roles in a business. If you are a small business owner, proper succession planning can help you avoid many of the negative consequences of a sudden change in ownership or management. Even if you do not plan to give up ownership in the immediate future, it is never too soon to get started on a business succession plan. Once you are ready to move on to a new business venture or retire, the plans for selling or passing on the business will already be started. Ideally, succession planning should be an ongoing process that is updated as your business changes and grows.
Hire Employees Capable of Taking on Leadership Roles
Sometimes, a business owner wants to keep a business in the family. He or she may have an adult child or other relative that he or she hopes will eventually take over the business. However, passing the business to a family member is not always be the best option. It is also possible that the intended recipient of the business decides that he or she does not want to be a business owner. This is why it is crucial that business owners hire employees who are capable of filling leadership roles as they become available.
Who is Entitled to Spousal Support in Illinois?
If you are getting divorced, you may wonder whether or not you will be able to receive spousal maintenance. Also called spousal support or alimony, spousal maintenance refers to payments that a spouse makes to the other spouse after a divorce. Although women were traditionally the recipients of maintenance, spousal support laws apply the same to men as they do women. Spousal maintenance is typically ordered when there is a significant difference in the spouses’ financial circumstances or when a spouse sacrifices career or educational opportunities for the benefit of the household.
Factors Considered by Illinois Courts When Determining Spousal Support
There are two ways that a spouse may be considered eligible for spousal support. The first is when the couple have already made spousal support decisions through a prenuptial agreement. Unless there is a problem that invalidates the prenuptial agreement, the court will uphold the arrangements to which the spouses agreed.
Mistakes to Avoid When House Shopping
Purchasing a new home can be both exciting and intimidating. Looking at different real estate listings, daydreaming about your ideal home, and gathering different decorating ideas can be fun. However, dealing with the financial requirements and trying to understand the real estate and legal jargon can be confusing. Therefore, consulting with your own DuPage County real estate attorney when you are ready to make the move is essential.
There are several common mistakes made when shopping for a new home, and knowing what those mistakes are can help you avoid those pitfalls.
Mistake #1: Looking Before You Are Ready
The first factor to consider is if you are really ready to purchase a home. Although you may prefer to build equity each month instead of handing your money to a landlord, most real estate specialists agree that if you are planning on moving away from the area in which you are currently living, then you should avoid purchasing a home until you know where you will be settling. If you purchase a home now, you may not be able to resell or rent the home when you move away.
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