Dividing Financial Accounts in an Illinois Divorce

 Posted on August 31, 2021 in Divorce

The division of assets can be one of the hardest parts of the divorce process, both because of the financial implications and the personal attachments that each spouse may have to the property. Your home may be the first thing that comes to mind when you think about dividing property in a divorce, but you will also need to determine how to handle a variety of different financial accounts including bank accounts, investment portfolios, and retirement accounts. Each of these has its own unique considerations when it comes to dividing them while protecting your interests.

Which Accounts Are Considered Marital Property?

In Illinois, assets are considered to be marital property based on when they were acquired. If you opened or made contributions to a financial account during your marriage, that account is most likely a marital asset and subject to division in your divorce. Importantly, an account does not have to be jointly held in both spouses’ names in order to be a marital asset. However, if you have an account that was funded entirely before your marriage, or funded entirely with non-marital assets like an inheritance, the account may belong entirely to you.

Dividing Different Types of Accounts

Here are some of the most common types of financial accounts that married couples may have, as well as what you will need to consider when dividing them:

• Checking and savings accounts - Dividing consumer bank accounts is often fairly straightforward, since the assets have a clear monetary value and can be easily withdrawn or transferred without significant consequences.

• Investment accounts - Dividing a portfolio of stocks, bonds, and other investments can be more complicated. If your investments have grown in value throughout your marriage, selling them can trigger large capital gains taxes, so it may be in your best interest to divide the shares without selling.

• Retirement accounts - Removing money from an IRA or 401(k) can result in early withdrawal penalties. To avoid these penalties, you will need to make sure that your divorce resolution clearly details how the accounts should be divided, and you may need to obtain a Qualified Domestic Relations Order (QDRO) to divide certain kinds of accounts.

If you have any credit card accounts or loans, you and your spouse will also need to determine how to fairly distribute your outstanding debt.

Contact a Geneva Divorce Attorney

At Serrano Hanson, we know that there are many important details to address when it comes to the division of assets. We can help you protect your financial interests through negotiation or litigation and determine the best way to separate your finances without suffering excessive losses. Call us at 630-844-8781 today to learn what our Kane County property division lawyers can do for you.

Sources:

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

https://www.fidelity.com/life-events/navigating-finances-during-divorce/what-you-need-to-know-about-splitting-assets