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Naperville Family Law AttorneyWhen a divorcing spouse is a doctor, accountant, attorney, or another professional with a private practice, this can heavily influence the property division process during divorce. A professional practice is often considered a marital asset, which means it would be subject to equitable distribution in a divorce. However, there are certain special considerations that must be taken into account when dividing a professional practice. It is important to seek legal counsel early on in the divorce to determine how best to protect your interests.

Spouses May Both Have a Right to a Portion of the Professional Practice’s Value

If a professional practice is considered marital property, both spouses may have a right to the value of the professional practice. This is likely to occur if the practice was opened during the marriage or if the non-owning spouse contributed to the development and growth of the practice. 

Professional practices that are considered marital property must be assessed and divided during property division, just like any other asset. Ideally, the spouses can work out an agreement regarding the division of marital assets and debts and avoid a contentious court trial.  The spouse who owns the professional practice may need to compensate the other spouse for his or her share of the practice with other marital assets. If the spouses are unable to reach a property division settlement, the court will step in and make a decision about how to equitably divide marital proeprty. 

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DuPage County Family Law AttorneyA crucial part of the divorce process involves dividing the spouses’ assets and debts. Depending on your particular situation, you may need to address real estate, vehicles, art and collectibles, business interests, and many other assets. You may also have credit cards, loans, and other debt to deal with during the property division portion of your divorce. One issue that can make the division of assets even more complicated is asset “dissipation.” The word dissipation refers to waste, misuse, or destruction of property. In some cases, divorcing spouses may recoup the value of dissipated assets through a dissipation of assets claim.

What Counts as Dissipation of Assets?

Illinois law states that dissipation occurs when marital property is sold, destroyed, or used for a purpose unrelated to the marriage and in a way that only benefits one of the spouses. The waste of assets must occur during the marriage’s “breakdown” to count as dissipation. The marital breakdown is usually defined as the point at which the couple stops trying to salvage the marriage. For example, if you and your spouse decided to divorce and then he or she destroyed your shared property in revenge, you may have a valid dissipation of assets claim.

Other examples of dissipative acts may include:

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DuPage County divorce lawyer

Of the various issues that must be addressed during a divorce, matters related to a couple’s property and finances are often among the most complex. When negotiating a settlement that fully details the division of marital property, spouses will need to make sure they fully understand the different assets they own, the value of their property, and how dividing these assets will affect each spouse’s finances both immediately and in the future. These determinations can be especially complicated in cases where one or both spouses are business owners, and a business valuation will usually need to be performed to ensure that the spouses fully understand the value of business assets and the ways these assets may be divided fairly and equitably.

Business Valuation Methods

The approach taken to determine the value of business assets will depend on a variety of factors, including how the spouses expect ownership of the business to be handled, whether they plan to sell the business, and whether the business may increase in value in the future. Spouses will usually need to consult with financial experts when performing a valuation, and these experts may use one or more of the following methods:

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Naperville IL divorce lawyerMost couples buy a home at some point in their marriage. The family home is often the most valuable asset a couple owns, and the prospect of figuring out how to divide it in a divorce can be daunting. Fortunately, Illinois courts have established means of handling property division during divorce, and homes are no exception.

Who Gets to Keep the House?

Sometimes, it is necessary for a divorcing couple to sell the family home and divide the equity. However, it is common for one spouse to keep the home. Which spouse that will be may depend on a variety of factors, including each spouse’s financial situation, employment, and personal preferences. If there are children involved, the parent who is given the most parenting time may get to keep the home. The spouse who leaves the home may be able to recover their share of the home’s value in one of several ways.

Buying Out the Value of the Home

The spouse who stays in the home will usually do one of the following:

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Naperville IL divorce lawyerRetirement funds, such as pensions and 401(k) accounts, are often a substantial issue in an Illinois divorce. For a couple who have earned average incomes throughout the duration of their marriage, retirement accounts can make up the majority of their accumulated wealth. As such, spouses are often concerned with the impact of a division of retirement savings as a consequence of their divorce.

In our last post, we discussed the impact of divorce on Social Security benefits. Here, we will examine the way that retirement accounts are handled in a divorce.

401(k) and Contribution Plans 

Unless spouses signed a valid prenuptial agreement stating otherwise, 401(k) plans with contributions during the marriage are considered marital property and may be subject to division. Though contributions from before the marriage may remain non-marital assets, contributions during the marriage belong to the marital estate.

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