In a recent case In re the Marriage of Roman-Kroczek, 2021 IL App (1st) 210613, the Illinois appeals court heard an appeal related to the award of attorney’s fees, which was not the first appeal in this divorce case. The wife’s name is Krystyna and the husband’s name is Bohdan. This appeal dealt with the issue of an injunction and how the appellate court found that the trial court did not utilize an injunction properly. Case Background The Parties Borrowed Money for a Florida Property During their marriage, the couple purchased a property in Florida in 2006. They did not have enough money for the real estate purchase, so Krystyna’s sister, Izabela, gave the couple a loan. Izabela had given the couple loans before to buy real estate for other real estate purchases. For the Florida property purchase, Izabela had given a loan of $350,000 and so far, the parties had only repaid $200,000. Izabela Intervenes in Her Sister’s Divorce Case When the parties filed for divorce, Izabela asked the court to allow her to intervene in the proceedings so she could recoup the monies she had loaned her sister and brother-in-law. Izabela filed a complaint against both Krystyna and Bohdan seeking $214,643.75, which consisted of principal, interest, and expenses she incurred in connection with loaning the money to the parties. The trial went forward on October 7, 2015. Both Krystyna and Bohdan agreed to execute a lien on the Florida property so that Izabela was made whole. After trial, the trial court entered a judgment dissolving the marriage and made a finding that the Florida property was worth $1 million and also had a mortgage of $615,918. The trial court found that Izabela was owed $214,643.75 from financing the property and also that she was owed up to $485,400 for money she had loaned Krystyna for living expenses and litigation costs. The trial court’s order awarded the Florida property to Izabela. Izabela then paid off the mortgage on the Florida property for $712,871.86. Izabela later sold her home in Winnetka and moved into the property in Florida with her husband. This Was Not the First Appeal Bohdan had previously filed an appeal where he was successful on a different issue. It had been four years since the case was remanded back to the trial court for a rehearing. On remand, instead of the case coming to be heard again for trial, the case continued to be litigated. Bohdan filed a motion for interim and prospective attorney fees because he did not have the funds necessary to litigate. Bohdan asked the court to sell property in Poland and the Florida property so he would have access to funds in the litigation. He was unable to afford an attorney, and his wife was using funds given to her by her sister. Judge Rules in Favor of Bohdan to Sell Florida Property for Attorney’s Fees The trial court issued a ruling on Bohdan’s motion for interim fees on January 29, 2020. The trial court found that the Florida property was a marital asset, and then ordered Izabela to secure a line of credit on the Florida property for $275,000 and distribute $200,000 of the funds generated by that loan to the parties’ attorneys while placing the other $75,000 in escrow. When Isabela was not able to get a loan or a line of credit to take out $275,000.00 as ordered, the court ordered the Florida home to be sold, and the monies received from the sale to be placed in escrow. Sister Appeals the Court’s Injunction Against Her Following the court’s order to sell the Florida property, Izabela filed her appeal. At the heart of the appeal was whether the judge’s order was an injunction or not. The Illinois Supreme Court has explained that an injunction is a “`judicial process operating in personam and requiring [a] person to whom it is directed to do or refrain from doing a particular thing.’ “ In re A Minor, 127 Ill. 2d 247, 261 (1989). Injunctions are common in family law cases and are used to either force someone to do something, or to refrain from doing something. In this case, the trial court’s order requires Izabela to take certain actions, namely that she lists and sell real property in order to comply with the order. Since Izabela was required to “do a particular thing,” and the order operated as a mandatory and coercive directive aimed at Izabela’s conduct, the appellate court found that Isabela was subject to an injunction. The appellate court found that the trial court’s ruling for Isabela to sell her house was unreasonable and therefore amounted to an abuse of discretion. Appellate Court Shows Frustration 10 Judges Have Worked on this Case and Its Still Unresolved The appellate court clearly seemed aggravated with this case. They commented that ten (10) judges had issued rulings in this case and the divorce was filed nine years ago. When they overturned the first judgment and remanded the case back to the trial court four years ago, instead of making sure that the case was handled expeditiously and finalized, the case continued to languish. The appellate court appeared to chastise the trial court for ordering the sale of the property for attorney’s fees instead of issuing final orders that would end the case. The appellate court saw no justification for delaying the case longer and found that the interim injunctive order was unreasonable and that the order did nothing to end the case. Court’s Remedy in the Injunction Was Not Narrowly Tailored The remedy the trial court arrived at (selling the Florida property to pay interim attorney’s fees) was not narrowly tailored to achieve its desired purpose. “An injunction should be reasonable and should only be as broad as is essential to safeguard the rights of the plaintiff.” In fact, the injunction entered by the court is a drastic remedy that only serves to delay the proceedings even longer, instead of giving the parties and the attorneys an incentive to bring the case close. The requirements to get an injunction are fairly strict. The plaintiff must be likely to succeed on the merits of the action, which means that your claim is true. You have to demonstrate that you would suffer irreparable harm if the injunction were not rendered (describe exactly what will happen to you), and the damage to you if the judge denies your request must outweigh the harm to the other party. Appellate Court Says “No” to Selling Marital Assets to Satisfy Attorney’s Fees The appellate court stated that the trial court may not order certain marital assets to be sold to directly satisfy an obligation for attorney fees before the divorce was finalized. The trial court’s injunction was subject to reversal on the basis that it is unreasonable and unnecessary under the circumstances. This case is going back to the trial court yet again. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/divorce-litigation/what-is-an-injunction-should-one-be-ordered-in-your-case/
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In Illinois, there are two main ways to go about changing your minor child’s name: by agreement, and by Court adjudication of the issue. As with all things related to co-parenting a minor child, the easiest and least costly method by which to proceed with changing your child's name is to reach an agreement with the other co-parent. In the event that two parents of a minor child cannot agree on a name change, the parent seeking to change the child’s name will have to file a Petition for Name Change of a Minor Child. Within that Petition, the parent seeking the name change will provide information about the request, and it is important that the Petition set forth why the name change is in the child’s best interests.
The law which governs name changes within Illinois states as follows: (c) A petitioner may include his or her spouse and adult unmarried children, with their consent, and his or her minor children where it appears to the court that it is for their best interest, in the petition and prayer, and the court's order shall then include the spouse and children. Whenever any minor has resided in the family of any person for the space of 3 years and has been recognized and known as an adopted child in the family of that person, the application herein provided for may be made by the person having that minor in his or her family. An order shall be entered as to a minor only if the court finds by clear and convincing evidence that the change is necessary to serve the best interest of the child. In determining the best interest of a minor child under this Section, the court shall consider all relevant factors, including: (1) The wishes of the child's parents and any person acting as a parent who has physical custody of the child. (2) The wishes of the child and the reasons for those wishes. The court may interview the child in chambers to ascertain the child's wishes with respect to the change of name. Counsel shall be present at the interview unless otherwise agreed upon by the parties. The court shall cause a court reporter to be present who shall make a complete record of the interview instantaneously to be part of the record in the case. (3) The interaction and interrelationship of the child with his or her parents or persons acting as parents who have physical custody of the child, step-parents, siblings, step-siblings, or any other person who may significantly affect the child's best interest. The emphasis and primary focus of the court in adjudicating this issue are whether the name change has sufficient indicators that the name change serves a compelling function for the minor child that is separate and distinct from the desires of either parent. As you can see, the court needs to see by clear and convincing evidence (a high standard) that the name change is not only a good idea for the child, but is necessary for the child at the time the change is requested. Frequently, courts look to whether there is a good affirmative reason to change the minor’s name, like their joining a new family with a step-parent. If there isn’t a clear indicator to the court that the name change is necessary to benefit the child, they are less likely to approve the change. Using a Child's Testimony to Support a Name Change As provided in subparagraph (2) of the law, the court can ask questions of the minor child in an “in-camera” proceeding about why they should have their name changed. This process is separate from the main hearing on the name change, and the child’s testimony can be used as evidence for or against the name change. An attorney defending a name change petition can argue that an in-camera interview is not necessary to adjudicate the issue and could potentially harm the child. Once the Court decides whether the in-camera interview should proceed, a skilled family law attorney defending against a name change will prepare for this in-camera interview by narrowing the scope of the questions, as well as ensuring that the process has a limited potential for harm to the child who will be going through the interview. Name Change Disputes in Illinois Illinois courts have been asked to review name-change disputes, and have established a standard of review for these matters. In the case In re Marriage of Piegari, the Court overturned a granting of a mother’s petition to change her children’s names to include her surname as a dashed last name, even where she had the vast majority of parenting time and was therefore responsible for enrolling the children in school and extracurricular activities. In Stockton v. Oldenburg, even when the court agreed that adding the father’s name to the child’s surname would be nice and would affirm the relationship with the father, the court was unable to find that that was enough to find that the change was in the child’s best interests. Stockton v. Oldenburg, 305 Ill. App. 3d 897. In contrast, in cases where the court granted a disputed name change, there was typically an extraordinary circumstance compelling the change. In In re M.E., the court on appeal overturned a previous denial of a change of name petition, because the biological father of the child was in prison for a sentence of fifty (50) years for holding the child’s mother at gunpoint. In re M.E., 2019 IL App (3d) 170759. The appellate court considered the following factors sufficiently compelling to grant the change in surname: the child considered her step-father to be her father, and the biological father and family of the biological father had little or no contact with her, and the father’s incarceration, and the violent circumstances giving rise to his incarceration. In re M.E., 2019 IL App (3d) 170759. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/family-law/how-to-change-your-childs-name-in-illinois/ As Chicago family law attorneys, grandparents often inquire about custody and tell me that their son or daughter is incapable of parenting their child. Since they consider their offspring and the child’s other parent unfit, grandparents seek to obtain custody of their grandchildren.
Rights of Grandparents In Illinois While the State of Illinois does recognize that grandparents have a limited right to see their grandchildren, their right to parenting time with a minor child or seeking custody of that child depends greatly on the specific situation and dynamics of the family. Prior to laws passed in recent years, getting court-ordered parenting time or custody of a minor child as a grandparent was extremely difficult. However, Illinois changed its laws on grandparent parenting time as it was recognized that the traditional family dynamic has changed over the years resulting in many grandparents having a much larger role in the care and support of their grandchildren. Filing a Petition for Parenting Time or Custody In filing a petition for parenting time or custody, grandparents need to prove first that they have standing in the case. Standing is a legal concept that requires a party to a case have some injury in fact that would directly relate them to the case. However, recent case law in these types of cases has leaned more toward the idea that standing is just one element grandparents must plead and prove in their petitions. For example, grandparents would need to show the court that they have been unreasonably denied parenting time with their grandchild by the grandchild’s parent. The grandparents are not required to show that they have physical possession of the minor child at the time of the filing of their petition. Besides showing that they have been unreasonably denied parenting time with the minor child, pursuant to Section 602.8(C)(1) of the Illinois Marriage and Dissolution of Marriage Act (IMDMA), grandparents of a child who is at least one (1) year old at the time would file a petition requesting parenting time only if they can prove that at least one (1) of the following conditions is met:
If the requirement under Section 602.8 is met, the Court will then review specific factors that are also outlined in the IMDMA in Section 602.8(b)(5). The factors that the court considers when deciding if a grandparent will get custody of a minor child or children or get parenting time are as follows:
Requires a Showing of Parent-Like Relationship Grandparents who file a petition for custody or parenting time will be required to show that they have more than just a biological relationship with the child, but a strong bond and nurturing parent-like relationship. Courts tend to trust a parent’s judgment when a grandparent is denied parenting time with a grandchild, but this can be overcome with the right set of facts and with an attorney who knows how to present the case to the Court. In addition to the factors listed above, it is important that grandparents are able to show the court that there if they are cut off from their minor grandchild and continue to be denied parenting time or custody, this would cause harm to the child’s mental, emotional, and/or physical health. The grandparents are not required to have possession of the minor child at the time of the filing of their petition for parenting time or custody, as recent laws have changed this requirement, but it certainly helps if this is the case. Seek Advice from Experienced Grandparents’ Rights Attorney Obtaining custody or parenting time as a grandparent has many nuances and requires the navigation of specific legal procedures. Retaining an attorney experienced in grandparent custody cases is important to ensure things go smoothly and you get the best outcome for you and your grandchild. If you are in the Chicago area and need legal advice about seeking parenting time or custody of your grandchildren, contact Anderson & Boback today. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/grandparents-rights/what-rights-do-grandparents-have-seeking-custody/ John Churchill believed that his ex-wife, Amy Churchill, was engaged in a de facto marriage, and because of that, sought to terminate his maintenance obligation. He tried two times to terminate his maintenance payments and both times the trial court denied his request. The appellate court found differently however and reversed the trial court’s ruling.
What is a De Facto Marriage? A de facto marriage looks exactly like a marriage, although the couple was never legally married. In some states, a long-term relationship where the parties are living together can eventually lead to a legally recognized marriage. This occurs even though there was no ceremony. In Illinois however, you can remain in a living arrangement forever and it will not lead to marriage. In Illinois, you have requirements to meet, like getting a license, before you can be legally married. A de facto marriage looks just like a marriage to anyone else, in that they are living together as spouses. Some typical requirements are that a de facto spouse lives under the same roof as the other person and that possessions have been pooled for joint use as a common household. In Illinois, we refer to this type of living arrangement as "cohabitation." Why is Cohabitation Important in Maintenance Cases? Unless you have agreed otherwise in your Marital Settlement Agreement, cohabitation is grounds to terminate maintenance. In Illinois, a party is entitled to terminate maintenance when a former spouse “cohabitates on a continuing conjugal basis” with a new partner. How that phrase is interpreted by the court depends on the facts in the case. The case of Churchill was a case where John believed his ex-wife was cohabitating and he attempted twice to terminate his maintenance obligation to her. Both times he failed at the trial level, but the appellate court believed John had met his burden on his second attempt and the Appellate Court overruled the trial court. Case Background As stated above, this is the second petition to terminate maintenance filed by John. Both times, John alleged that his wife Amy was cohabitating with her boyfriend Jared. Amy filed for divorce in late 2016 and in February 2017, Amy was given spousal maintenance of $5,000 a month and child support of $6,040.00 a month. John believed that Amy moved in with her boyfriend Jared, and because of that cohabitation, John sought to terminate his maintenance obligation. Evidence Presented At Trial At the termination trial, Amy testified that she met Jared in late 2016. Various events were testified to, including Jared visiting Amy at the hospital in January 2017, and that they went on their first date on Valentine's Day 2017. Amy testified that they engaged in sexual intercourse since February 2017. Amy estimated that Jared spent the night at her house seven times between February and April 2017, with the longest period being a weekend. Jared kept clothes at her home, which was the marital home, and at her rental place. Jared helped Amy move furnishings as well. There was testimony about how much time they spent together, and the different activities they engaged in, like movies and bowling. Jared also helped Amy with chores, like taking the trash out and mowing the grass. Jared helped with the children too, tutoring one of the sons with his Spanish homework and attending their extracurricular activities. Evidence was heard that Amy even received packages to the house by the name of Amy Fogle. Amy vacationed in Las Vegas with Jared to celebrate his birthday, but she testified that she paid her share of the trip. They also traveled for family gatherings. The Boyfriend's Testimony Jared testified that his permanent home address was in Texas, although his business moved around. His time with Amy was only temporary since he intended to remain in Texas once his business in Morton was completed. Although he spent a few nights at Amy's house, he stayed primarily at his converted living space by his office. Jared testified that he did not have a key to the marital residence nor to her new apartment. Jared did have items delivered to her home but did not keep any toiletries there. Private Investigator Sheds Light on the Number of Overnights Jared & Amy Spent Together Other witnesses testified that Amy bought Jared a ring and that they were authorized users on each other’s credit accounts. The private investigator testified that he surveilled Amy’s house and Jared’s business to track the nights spent together. Amy was Awarded $10,000 in Permanent Monthly Maintenance and John Appealed After hearing the evidence, the trial court entered an order denying John's petition to terminate temporary maintenance. The court awarded Amy permanent maintenance in the amount of $10,000 per month. John argued on appeal that the trial court erred when it denied his petition, and the appellate court first agreed with the trial court. John filed again to terminate maintenance. The Court Denies John's Petition Again in the Second Trial This time, Amy testified that she did not plan to end her relationship with Jared. She still had no plans to marry, but they did spend a lot of time together. The testimony was extensive and included all the trips they’d taken together, vacations spent, and family outings. The private investigator testified that the investigation began on June 24, 2018, and ended on August 5, 2020. During that time, she made 115 visits to Amy's home address in Morton, Illinois. Throughout her two-year investigation, the investigator saw a pattern with Jared parking his truck at Amy's home frequently and that Jared stayed at Amy's home for approximately 75% of the time during the time she investigated. After hearing the evidence, the trial court denied John's petition to terminate maintenance again. Illinois Law on Termination of Maintenance for Cohabitation In Illinois, maintenance terminates if you are in a resident, continuing conjugal basis with another person. The Illinois statute that deals with maintenance and termination is Section 510(c) of the Illinois Marriage and Dissolution of Marriage Act. That statute provides that "the obligation to pay future maintenance is terminated if the party receiving maintenance cohabits with another person on a resident, continuing conjugal basis." 750 ILCS 5/510(c) (West 2020). Under the law, it was John’s burden to establish that Amy was cohabitating with Jared. In determining whether John met his burden, the court looks to the totality of the circumstances and considers the following non-exhaustive list of factors:
Evidence of De Facto Husband-and-Wife Relationship The Appellate court reviewed the factors and found that both “Amy and Jared testified that they shared a monogamous sexual relationship. Factors leading to that finding included:
These activities give the appearance of a de facto husband-and-wife relationship.” The reviewing court also found that although neither shared a joint bank account, Jared used Amy's debit card at an ATM to withdraw money for her on at least one occasion. The two also intermingled other aspects of their life, including (1) opening a shared account at a jewelry store, (2) listing Jared's cat under Amy's account at the veterinarian, and (3) having Jared's vehicle invoices appear on Amy's account. Amy and Jared shared vehicles. Jared knew the garage code to access Amy's home. Jared also visited Grant's military recruiter and attended Grant's military send-off and military graduation. This evidence shows that Amy had interrelated much of her personal affairs with Jared's. Exchange of Rings a Significant Fact to Finding a De Facto Marriage While the trial court did not put much weight on the fact that Jared and Amy had exchanged rings, the Appellate court found that important. The exchange of rings is a significant fact to support a finding of a de facto marriage. Although Jared and Amy denied that the rings symbolized an engagement or marriage, the reviewing court could see no other way to interpret the significance of the rings. Further, Jared had mail sent to Amy's home addressed to "Amy Fogle." Amy claimed he used the name of Amy Fogle so she would know that it was from him. According to Amy, this meant she should wait to open the package until they were together. The reviewing court found that her explanation made no sense. Jared's and Amy's use of Jared's last name supports a finding of a husband-and-wife relationship. Appellate Court Finds There Is Cohabitation After reviewing the six factors and considering the totality of the circumstances, the Appellate Court concluded that most of the evidence established that Amy and Jared cohabited on a resident, continuing basis. 750 ILCS 5/510(c) (West 2020). Therefore, John satisfied his burden of proof, and the trial court's denial of the petition to terminate maintenance was contrary to the manifest weight of the evidence. If you believe that your ex-spouse is in a de facto marriage, speak to a Family Law Attorney to see if you have enough evidence to terminate your maintenance obligation. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/spousal-support/de-facto-marriage-and-terminating-spousal-maintenance/ A Brief Overview of Parenting Time in Illinois When a divorcing family with children tries to enter an Allocation Judgment finalizing all of the issues relative to the minor children, without a doubt, the parenting time schedule is one of the more difficult topics. Parenting time is what we now refer to what we used to call “residential custody”. The parenting time schedule dictates where the children will be on any given day of the week, where they sleep each night, who the minor children are with for school breaks, summer vacations and holidays. The parents have to determine a schedule for the minor children prior to their divorce being finalized. Over the years, the parenting time schedules have evolved to give both parents more time, based upon certain factors relevant to their situation. The court will often look at what the status quo parenting time has been for the twenty-four (24) months prior to filing. We are living in a different world than we were living in ten years ago. More parents than ever are working from home, or doing a hybrid work schedule. This allows parents who used to have to commute every day to reasonably accommodate school drop off and pick up on certain days of the week, to transport to activities and sports after school, and to all around be more involved with their children. It is allowing parents who were formerly stay-at-home parents to get back into the workforce through virtual employment during hours when their children are in school. As a result, parents are much more available for parenting time than they were, say, when they were spending 3 hours a day commuting prior to the pandemic, which opens up a new realm of possibility for more parenting time. What are the common parenting time schedules in Illinois? Some of the more common parenting time schedules give the majority of parenting time to one parent, with liberal parenting time to the other parent. Stereotypically, there used to be an “every other weekend” type schedule with the non-custodial parent, along with nights for dinner visits during the week. We can do better than this now in the world we are living in, so long as it serves the best interests of the minor children. In Chicago family courts, more and more we are seeing schedules where the parent with less parenting time will have overnight parenting time during weeknights. Of course, this only works when the parents live in close proximity to the school, to avoid an increase in commute times for the minor children. We are seeing a shift to more and more 40/60 parenting time schedules, and even some 50/50 parenting time schedules. Even the “every other weekend" parent will have substantial parenting time during the week; or they may have more summer parenting time, etc. Overall, parenting time is not a “one size fits all” situation. The schedule is always determined based upon:
Can my child’s other parent deny me access to my children? In sum, absent an order which precludes access to the minor children, such as an order of protection, or another court order, the other parent should not deny access by one parent to the minor children. In fact, that could reflect badly on the parent who is denying access once the matter is before a Judge when it is not otherwise warranted. There are some limited exceptions, though, particularly when the parents were never married and the second parent did not sign a Voluntary Acknowledgement of Paternity/Parentage and is not listed on the birth certificate. In those situations, you’d need a parentage order before a court would allow parenting time, and that would need to be adjudicated. If you were to contact the police to try and see your children in that situation, they legally cannot do anything about the other parent withholding the children because legally you aren’t recognized as their second parent until a parentage order is entered. Parents who are married at the time a child is born, or a parent who appears on a birth certificate for a minor child, should not be denied access. (Realistically, though, in our experience, if there is no parenting time order and the parties are arguing about who can spend time with he children and the police are called, most of the time the police will tell the parties to go to court and get a court order before they will intervene.) It is best to negotiate a temporary parenting time schedule in any divorce or parentage matter with minor children so that there is a governing interim court order explaining exactly what the parenting time looks like. The order is enforceable in the event of a disagreement and it helps everyone have rules which govern the parenting time schedule so that everyone has the same expectations. These temporary orders can be entered in the interim during a divorce or parentage case before a final order is entered and are extremely helpful for managing the parent and children’s expectations and keeping them on a schedule. How often should I speak with my children when it isn’t my parenting time? Sometimes access to the minor children can be a problem in divorce and parentage cases. Usually, a final Allocation Judgment allows children to contact their parent whenever they want to (within reason) and sets forth some sort of phone or video chat access schedule for younger children who are old enough to sit with an iPad or on a phone for a small period of time. This does not work with younger children as well because they cannot sit still long enough to have a phone call. There are some limited exceptions, such as when parents live out of state from a young child, though – the calls just generally cannot be very long and both parents have to cooperate to effectuate them. Having carved out time in an Allocation Judgment for older kids, such as teenagers, also can be a bad idea, but depends on the situation. A teen who has a great relationship with both parents is probably going to call them often without having a “schedule” in place. A teen who is working to repair a relationship with a parent might need some coercion or a schedule in a court order for the calls to take place. It completely depends upon the situation. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/child-custody-visitation/tips-for-negotiating-parenting-time-schedules/ Going through a divorce can be costly in more ways than one. Hiring a divorce attorney will cost money, but divorce is also costly to your mental and emotional health. Time and money are spent in the divorce process, so you want to do your best to also avoid costly financial mistakes that can be made during and after the divorce case is finalized. The best way to avoid any unintended financial mistakes is to talk to an experienced divorce attorney, or even consult with a financial advisor.
Here are some of the most common financial mistakes that are made during the divorce process: Financial Mistake #1: Fighting to Keep the Marital Home Make sure to consider all of your options before fighting tooth and nail for the marital home. Keeping the marital home will likely involve a refinance of the mortgage and a buy-out of the other spouse’s equity in the house. This refinance will increase the mortgage payments, so you probably won’t be paying what you used to be paying per month to live in the house. Also, before the divorce, you and your spouse might have been sharing the cost of the taxes insurance and utilities, but now, you will be 100% responsible for those monthly expenses. Do your math before you start your fight for the house. Figure out first if you will be able to afford the house, and whether those payments will be worth it. Being awarded the house in the divorce does not sound so great when you have to eat Ramen noodles every night and skimp on toilet paper just to afford to live there. Financial Mistake #2: Not Understanding the Different Types of Retirement Accounts It’s important to remember that not all retirement accounts are the same. There are retirement accounts that offer a set payment to you each month upon retirement, defined benefit plans, which are usually pensions. The longer you work, the larger your monthly payment will be from the pension plan. The other retirement plans are defined contribution plans, which include IRAs and 401(k) accounts, and the life. These accounts allow you to withdraw funds upon retirement age (with certain limits set by the law), but the balances of these accounts fluctuate based on the investments. Any funds that were added the IRAs or 401(k) accounts during the marriage, and any pension benefits that accumulated over the years of the marriage are all considered marital. Knowing what retirement accounts exist between you and your spouse, and how they will be divided, will help you identify your current retirement position, and what action you might need to take in the future to feel secure about retirement. Financial Mistake #3: Forgetting to Account For Taxes Just about everything about your tax situation is going to change upon divorce. You will have a new filing status, different tax bracket, and possibly a change to the dependents you claim if you or your spouse will get to claim the minor children, or you alternate each year. You should consider the tax implications of divorce before your case is final so you can adjust your withholdings appropriately on your paychecks. You also need to consider your future liability when it comes to your income. If you have dividends, sell stocks, or withdraw funds from your retirement, this could negatively affect your tax liability for the next tax year. Consider meeting with an accountant or other tax preparer so you won’t be surprised about your tax liability once the divorce is final. Financial Mistake #4: Assuming “Equal” Division Is the Fair Division of Property A house in divorce does not have the same value as a retirement account. A rental property does not have the same kind of value of a car. When trying to settle a case, you need to think about more than just the inherent value and whether it is worth it on your end to fight for an unequal division of some assets. If you are planning on receiving 50% of the equity from the marital house, that is money you get at the divorce and unless you invest it, that’s all the money you get. However, a retirement account that is divided has the potential for losses and gains but hopefully gains if you won’t be retiring for many years. A car’s value will go down the longer it is used and the older it gets, but a rental property has the potential to earn you additional income despite having bills to pay and possible loss in value. Consider the real value of the property and other assets you are going to be dividing in your case and think about what might have more value for you based on your financial situation currently and in the future. Financial Mistake #5: Don’t Make Financial Decisions Based on Your Emotions It's understandable that many people will be emotional during their divorce, however, you have to attempt to separate your emotions from trying to settle the financial side of your case. One spouse might want to fight tooth and nail for their pension, or their house, or even a particular car because they want to get back at the other spouse and they know the other spouse also wants those particular items or property. Even worse is fighting over small items, like lamps, silverware, or other household items just because you don’t want your spouse to get them. Allowing your emotions to get in the way can drag the case out causing additional, and unreasonable litigation, ultimately resulting in higher attorney fees. Take some time to deal with your emotions before making any financial decisions, and consider your future financial security more seriously rather than focusing on getting back at a spouse. To learn more about these 5 financial mistakes, and to hear about more mistakes you want to avoid, listen to the interview between Anderson & Boback attorneys, Kimberly Anderson and Janice Boback, and Beth Kraszewski, President and Founder & Wealth Manager in Chicago focusing on Financial Planning for High Achieving Professionals. Click on the following link to hear the full interview and to get more advice: https://illinoislawforyou.com/resources/common-financial-mistakes-during-chicago-divorce/ THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: illinoislawforyou.com/divorce/top-financial-mistakes-to-avoid-in-divorce/ |
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