Once you finalize your divorce in Illinois, you can’t go back and renegotiate for a different set of assets. For this reason, it’s important to get everything right the first time — and some assets might not be as valuable as they look at first glance. You might not get an equal share if you take an asset without thinking about the implications.
What should you consider when you divide your assets?
To make the property division process easier, you might want to keep the house so you don’t have to move. However, if your spouse takes their name off the house, you might not be able to continue making mortgage payments as you did before. In fact, you might have to refinance the mortgage and make sure that you still qualify. If you don’t, your former spouse might have to keep their name on the loan agreement.
Other people make the mistake of taking investments that look valuable. To make money on your investment, you’ll have to sell it — and the IRS takes a portion of those proceeds. You might end up getting less than you would have if you’d just accepted cash. A divorce attorney could point out potential tax issues and steer you away from making any major mistakes.
Similarly, you might assume that you or your estranged spouse can withdraw money from your retirement funds with no penalties. In fact, the IRS might tax these funds at a rate of 20%. You might also have to pay an early withdrawal fee if you haven’t reached retirement age. To avoid paying extra fees, you might have to get a Qualified Domestic Relations Order (QDRO) that permits you to take money out of your account.
What are some other potential pitfalls?
Other potential issues include your spouse deliberately misvaluing their assets, investments dropping in value shortly after you take them or your spouse hiding properties from you. Your attorney will try to help you get a fair share of the assets with an eye to properties will still be valuable after your divorce.