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Divorce and finances, part 1: property division considerations

As necessary as divorce can be in certain cases, it is not without its ironies. One of those, in marriages strained by fights about finances, is that divorce often comes with its own set of financial challenges.

The particular challenges vary for each individual. But in Illinois and across the country, there are common themes that keep coming up as people try to carve out new financial models for themselves after going through a divorce.

Property division arrangements are of course very important in setting the stage for the structure. For example, if one spouse focused on raising the children while the other built a substantial pension, a procedure for sharing the proceeds from that pension or retirement account may be in order.

This can usually be done with something called a QDRO. This abbreviation stands for qualified domestic relations order, which is a way of directing the administrator of a retirement account to recognize the interest in it of another party besides the account holder.

Even if there are no children involved, property division is still a key process for making sure the money part of moving on from your marriage is fairly handled. This process begins with transparency about what the couple's property picture consists of. Especially in a high-asset marriage, you'll want to be sure you spouse isn't hiding any assets from you.

Keep in mind, too, that it's not only a matter of dividing assets; debts will need to be fairly divided as well. In the wake of the recent real estate crisis, dividing mortgage debt is not as easy as it used to be. After all, many mortgages remain underwater, even as the overall housing market finally shows signs of improvement.

Source: "5 Ways Divorce Takes Your Money," Forbes, Kenneth Rapoza, 3-12-13

Our firm handles situations similar to those discussed in this post in Illinois. To learn more about our practice, please visit our page on property division.

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