Common Mistakes During Asset Division in a Divorce and How to Avoid Them

 Posted on November 13,2021 in Division of Property in Illinois

A crucial component of any Illinois divorce is dividing the spouses’ assets and debts. For many couples, the assets division process initially seems straightforward. However, the process often becomes much more complex than spouses expect. Tax implications, commingled assets, property with fluctuating value, and other complications can make property division one of the most challenging aspects of divorce. Furthermore, the consequences of property division can have a major impact on the parties for years or even decades after the split. If you are planning to divorce, make sure to be aware of common mistakes during the property division process and how to avoid falling victim to the same missteps.

Miscalculating the Value of Your Assets

Spouses who can divide property through an out-of-court agreement can save money and stress. However, when you make your own decisions about who gets what in the divorce, miscalculating the value of the assets can lead to a grossly uneven split. For example, you may decide to simply split your retirement funds 50/50 with your spouse only to suffer an early withdrawal penalty that reduces the value of the retirement asset. You may fight to keep the vacation home or only to realize years later that you cannot afford the home’s upkeep. You must also consider the tax consequences of any property you retain.

Assets with fluctuating values can also complicate the process. Cryptocurrency is becoming increasingly relevant in divorce proceedings. Because digital currency can vary dramatically in value from day to day, you must decide how to account for this fluctuating value during asset division. Stocks, stock options, and other investments with variable value can be nearly impossible to properly value without an expert opinion.

Failing to Negotiate a Fair Settlement

Negotiating a divorce settlement takes time, patience, and a deep understanding of what you own and what you owe. The key is finding the balance between letting your spouse walk all over you and being too stubborn. By refusing to compromise, you can drag out the divorce process and cost yourself money in legal fees. However, you do not want to go to the other extreme and give your spouse everything he or she wants. An experienced divorce lawyer can help tremendously in this aspect.

Failing to Disclose All of Your Assets and Debts

During your divorce, you will be asked to list all of your assets and debts. Do not assume that you can get away with neglecting to disclose all of your property. Evidence of these so-called “hidden assets” may lurk in your tax returns, loan applications, bank statements, and other financial records. Not only is hiding assets in a divorce a sure way to make the divorce more contentious, it is also against the law.

Contact a Joliet Divorce Lawyer for Help

The best way to ensure you do not make major mistakes during your divorce is to work with an experienced divorce lawyer. Call the Plainfield, Illinois divorce attorneys at Law Offices of Tedone and Morton, P.C. for help. Call 815-666-1285 for a free, confidential case assessment today.

Sources:

https://www.cnbc.com/2020/12/10/avoid-these-mistakes-when-splitting-assets-in-a-divorce.html

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm