Although every divorce is challenging in some way—whether financially, emotionally, or both—when it is you going through a divorce, it can often seem like the very worst thing you could go through. It can also seem like it will never end. One of the most important factors in an outcome to your divorce that is fair and equitable is having an experienced family law attorney in your corner from start to finish.
When you have a knowledgeable Vaclavek Hartman Vaclavek attorney by your side, you can rest assured that your rights and your future are being taken care of by someone who truly cares about the outcome. At Vaclavek Hartman Vaclavek, we have empathy for your current situation, and will always treat you with the utmost respect. We believe that being open and honest—operating in fully transparency—is the only way to earn and keep your trust. Below are some of the questions we are frequently asked regarding divorce in Barrington, Illinois.
- Why is a divorce with more assets more challenging? Although ever divorce comes with its own set of difficulties, the more assets involved, the more challenges you are likely to face. While a middle-income couple may have a house a car a bank account, and possibly, a retirement account, a high net worth individual can have those assets, along with rental properties, vacation homes, ownership or part ownership in companies, equity options in pre-IPO stock, and partnership holdings. It can be much more difficult to determine the value of such assets, and when many of these assets exist, the process can be very time-consuming. A high net worth divorce will almost always take more time, as assets must be found and valued as well as liquidated and transferred, in some cases. Finally, while low and middle-income families are generally paid bi-weekly or monthly (steadily and easily predicted), many high net worth individuals do not draw a “regular” paycheck, and could be paid at least partially in bonuses, royalties, rents, and dividends. High net worth individuals may enjoy a company car or a company credit card, and while their income is substantial, it may not be all that easy to predict.
- How can I find out how many assets my spouse really has? If you were not all that involved in the financial affairs of your marriage, you may wonder how you will know whether your spouse is being honest about the assets during your divorce. Your attorney will know what questions to ask, as well as the various discovery methods. If you do not believe your spouse will voluntarily disclose the correct financial information, there is a formal, legal process which can be used to access this financial information. This process is referred to as the discovery process. Your attorney will ask your spouse to produce such financial documents as account records, tax returns, bank statements, any loan applications, mortgage records, credit card receipts and any other relevant financial documents. Your family law attorney may utilize interrogatories which require your spouse to answer questions in writing. Your divorce attorney may ask to inspect such things as a safe deposit box, art collections or other types of collections with a significant value. Your attorney may also set up a deposition, where your spouse will be required to testify under oath regarding marital assets.
- I think my spouse is hiding assets. How can I find them? Despite the fact that hiding assets is both unethical and illegal, a significant number of spouses may hide assets during a divorce, particularly in a high net worth divorce. It is important to remember that the settlement you get from your divorce is it—you will not be able to come back later and ask for more, even if you find out your spouse was hiding assets. One way of finding hidden assets is to have a lifestyle analysis conducted which will establish a clear picture of your standard of living during your marriage. This can be an invaluable tool in determining whether there are hidden assets or income, as well as determining alimony and child support. There are a number of ways spouses hide assets, including:
- Buying expensive items which can be easily overlooked during the divorce;
- Transferring stocks into “dummy” companies;
- Deferring salary or bonuses until after the divorce;
- Delaying signing a contract;
- Setting up an account in the name of a child, using the child’s social security number, making it difficult to locate the account;
- Stashing money with friends or relatives, in a safe deposit box, or even in books or other items around the house;
- Underreporting income on tax returns or financial statements;
- Taking out “loans” from friends or family members in order to be able to deduct those expenses from the financial bottom line, or
- Overpaying a creditor or the IRS, then applying for a refund after the divorce is final.
- How can I ensure that my assets are properly handled during a divorce? The primary way of ensuring your assets are properly handled during a divorce is to have an experienced Illinois divorce attorney who is fully in your corner. You must also carefully identify all your assets—what belongs to you, what belongs to your spouse, and what the two of you own as marital assets. Whenever possible, have a complete, printed list of every financial document in your possession before you file for divorce or inform your spouse you are about to file for divorce. Otherwise, you risk being locked out of your financial information should your spouse change the passwords to your joint accounts. With your divorce attorney, determine what you can live with—and what you cannot live without. Finally, know the laws for asset division in your state. Of course, your lawyer can help you with this, but when you also have the knowledge you will understand the process much better.
- What do I do if my spouse violated our prenuptial agreement? A prenuptial agreement is a contract that two people enter into prior to marriage. Both parties must agree to the terms of the prenuptial agreement, and both parties must abide by the terms should the marriage end in divorce. A prenuptial agreement identifies and divides separate and marital assets, in theory, making it much easier to split assets during the divorce. Spousal support can be included in a prenuptial agreement, however, you should be aware that all prenuptial clauses are subject to a judge’s review, so if your agreement is not fair, the provision could be eliminated by the judge. Typically, such things as child custody, parenting time, child support, daily tasks or spousal duties may not legally be included in a prenuptial agreement. If your spouse does not abide by the other terms of your prenuptial agreement, you will need to discuss this with your divorce attorney.
- What can I get in spousal support/alimony? Like child support, there is also a guideline formula. Alimony is also called spousal support, or maintenance, and is a payment that one spouse makes to the other following a divorce. When there is a discrepancy in the income of the spouses, the court may attempt to put each spouse in an equal financial situation following the divorce. Under Illinois law, a spouse may request temporary alimony while the divorce is pending. In addition to temporary maintenance, the judge can award rehabilitative maintenance (meant to provide financial assistance while the receiving spouse works on job skills or otherwise attempts to become self-supporting), or long-term maintenance (for long-term marriages, usually for an older spouse with limited job skills, or one who is ill and unable to support himself or herself). Either spouse can request financial support for the other, but if both spouses are self-supporting, the court may deny a request for maintenance even when one spouse makes significantly more than the other. The court will determine the income and property of each spouse, the need for support by the requesting spouse, the present and future earning capacity of each spouse, whether the requesting spouse’s lower income is due to decisions made during the marriage (one spouse stays home to raise children while the other works and provides a salary), the length of the marriage, the physical and emotional health of each spouse, whether one spouse contributed to the other’s education, and any agreement made before or after the marriage.
- Am I entitled to my husband’s retirement accounts that are in his name if I didn’t work? Retirement accounts which were funded during the marriage are likely a marital asset. There are some accounts which can be divided by directives to the Financial Institution and some which require specific court orders (QDRO or QILDRO) to divide.
- How will we split the ownership and value of the business we own together? Joint ownership of a business can be difficult to divide during a divorce. There are three methods used when distributing business interests during a divorce. The first of these is a buy out—one spouse buy’s out the other’s interest in the business. A buy out only works if the buying spouse has enough cash, although one spouse could agree to a structured buy out—buying out half the business over time. If the couple gets along well, they may decide to continue jointly owning and running the business following the divorce. Finally, the business can be sold outright, and the proceeds divided according to the percentage of business interest of each spouse.
- What are the special issues involved in child support and spousal maintenance in a high net worth divorce? There can be some special issues seen in a high net worth divorce that might not be seen in a more traditional divorce, particularly related to child support and spousal support. In a high net worth divorce, the child support guidelines might not apply—in general, when parents earn more than $500,000 per year, the guidelines are not followed as they are for lower income parents. The reasonable needs of the children will be determined, along with the relative ability of each parent to provide financial support. “Reasonable needs” in a high net worth divorce could include private school tuitions, expensive lessons, employment of a full-time nanny or au pair, future college tuition, and high-priced summer camps or hobbies. Parents may also want to set up trust funds for the future of the children. It is important to note that the wealthier parent is not guaranteed custody. As far as spousal support, if both spouses have a high net worth, then spousal support will probably not be an issue. If, however, one spouse has a high net worth and the other does not, then the spouse with fewer assets could be considered to be dependent on the other. As an example, a spouse who stayed home to raise the children and tend to the house while the other worked in a professional capacity, might be considered dependent on the higher-earning spouse. In a high net worth divorce, long-term alimony may be awarded to the dependent spouse, although the court will use its discretion to determine the amount, duration, and manner of payment of spousal support.
- What are common mistakes in a high net worth divorce? Some of the most common mistakes seen in a high net worth divorce include the following:
- Agreeing to anything and everything simply to be done with the marriage. Unfortunately, some marriages have reached the stage where either one of the spouses have a new romantic interest and want to get out of the marriage quickly, or there have been so many arguments and heartaches in the marriage that one or both spouses want out quickly. Any time a partner in a marriage agrees to unfavorable terms regarding spousal support, child custody or asset division, the financial effects can be devastating. Make sure you have set your emotions aside and looked at your long-term future before you agree to any divorce settlement. Remember that the way you feel today is unlikely to be the way you will feel six months from now, or even a year or two down the road.
- Hiding assets. Let’s be clear—hiding assets from your spouse is never okay. Quite often a spouse—generally the one with more assets—may decide to transfer expensive assets to a third party (a business partner, family member or child from a prior marriage). Such transfers can later be declared fraudulent, causing that spouse to completely lose his or her credibility in the courtroom.
- Failing to account for all assets and liabilities. A financial affidavit and other financial documents are required by the court during a divorce. This inventory should be taken very seriously by both parties, ensuring all the information is up-to-date, and accurate. It can be extremely time-consuming to gather all this information, but if you neglect this very important task, you could end up being stuck with liabilities which are not rightfully yours, or relinquishing assets which are rightfully yours.
- Not considering tax consequences. You may end up being taxed on assets or distributions you receive, or you might approve an amount of spousal support without considering what your after-tax income will be. Spouses in all high net worth divorces must consider tax matters, both current and future, very carefully.
- Letting your anger over the divorce motivate your actions. You may be very angry about the divorce, and you may even have good reason to be angry. This anger leads many people to want to make their spouse “pay” for the hurt he or she caused. Think about it this way—the money you are forcing your spouse to pay because of your anger, is your money as well. Now is the time to let your attorney determine the best settlement on your behalf.
- Failing to hire the best divorce attorney. This is one mistake made frequently by those going through a high net worth divorce—or any divorce. During a time when you are not likely to be thinking clearly, an experienced, knowledgeable California divorce attorney can guide you around legal mishaps, leaving you with a much more financially secure future.
How Can a Divorce Attorney from Vaclavek Hartman Vaclavek Help?
Attempting to handle your own divorce is akin to attempting to set your own broken leg—rarely ever a good idea. It is extremely important that you have a professional by your side in the form of an attorney from Vaclavek Hartman Vaclavek who has significant experience helping people like you get through a divorce with the best outcome possible. At Vaclavek Hartman Vaclavek, we have a “client first” mindset as we help our clients through a “regular” or high net worth divorce in Barrington. Having a top divorce lawyer in Barrington to guide you through the maze of decisions you will be required to make during your divorce is invaluable. We are accessible and available, and work hard to empower our clients so they can better understand their divorce, in turn, making more informed and confident decisions. Contact Vaclavek Hartman Vaclavek today for the best divorce attorney Illinois and the surrounding areas.