Divorce is a complicated and emotionally fraught process, but for couples with a high net worth or who have high-value assets to divide, the divorce process can be even more complex. Careful planning is often necessary to ensure that both partners have access to relevant financial information so that an equitable asset division can be arranged. Furthermore, even issues that are not related to asset division, such as child support, can be affected by exceptionally high incomes. If you are in the beginning stages of divorce and are looking for help from a great team of highly experienced high net worth divorce attorneys, read this blog for a brief overview and then contact Goostree Law Group.

High Net Worth Asset Division

Illinois law requires assets to be divided fairly, but not necessarily equally. Because the question of what constitutes a “fair” asset division is highly subjective, couples should try to create a financial agreement of their own before approaching a judge for help. A fair division will consider each party’s contributions to the marital estate, including non-monetary contributions like child-rearing and housekeeping.

High net worth couples often have prenuptial agreements protecting certain assets from the asset division process, but this does not necessarily guarantee that there will be no disagreement over whether, for example, a piece of property owned by one partner but lived in by both during the marriage is marital or private property. All premarital agreements should be checked for validity and fairness.

As a marriage begins to irretrievably break down, both spouses are usually aware that they are headed for divorce. One of the most common consequences of this knowledge is the gradual separation of each spouse’s income and belongings, especially if one spouse moves out or plans to move out. However, despite their best efforts at separating personal and marital property, spouses must still face the scrutiny of a judge’s approval when getting divorced.

Following Illinois law on property division when it comes to things like bonuses, stock options, performance incentives, etc., can be challenging - especially when spouses disagree about whether they should share this compensation. Read on to learn how bonuses are handled in Illinois divorces and then schedule a consultation with a divorce attorney to discuss the specifics of your case.

How Are Bonuses Handled in Illinois Divorces?

Under the law, marital assets and debts must be divided fairly. This does not necessarily mean equally, and spouses are free to propose or negotiate asset divisions that they both consider fair, although any proposal must be approved by a judge.

When 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. 

A 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:

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: