What if You Discover Hidden Assets During Your Divorce?

hidden assetsIn a 2014 survey, one in three people admitted to “cheating” financially on their spouse. It could be anything from hiding bills from their spouse to lying about how much money they make or how much debt they have, to something as big as hiding assets from their spouse. But everything tends to come out during a divorce, so what do you do if you’re in the middle of divorce proceedings and you suddenly discover hidden assets?

Tell Your Lawyer

If you hired a good divorce attorney, your attorney will attempt to find any hidden asset(s) during the discovery phase of the divorce proceedings. You will work closely with your attorney to review the financial discovery from the other party to see if anything appears off or suspicious.  If the attorney finds anything suspicious, they’ll know the next best steps to take from there. It could be anything from asking the judge for more time for the discovery process to filing a motion to have your spouse held in contempt of court. There are many reasons people hide money and assets during a divorce, but it’s against Illinois law, and depending on the circumstances, people who do so risk contempt of court and even perjury if they lied under oath about the hidden asset. That means they may have to pay some hefty fines and might even serve some jail time.

If you happen to find out about the asset on your own (for example, if you find a misplaced bill or bank statement), then the first thing you need to do is inform your lawyer so they can determine the next steps to take.

Look for the Warning Signs

If you think your spouse may be trying to hide money from you or the divorce court, here are some things to look for:

  • Overpaying taxes – some people do this so they can collect a large refund after the divorce has been finalized.
  • Delaying raises or bonuses – some people ask their employers to hold off on raises or bonuses until after their divorce is final. If your spouse had mentioned they were expecting a raise or bonus that never came and they suddenly stopped talking about it, that would be something to investigate.
  • Putting property in someone else’s name – if it looks like they gave away a lot of money or sold an asset for much less than it was worth, that’s suspicious behavior that should be investigated, especially if the person who now “owns” it is a friend or family member of your spouse.
  • Suspicious business holdings – if one of their business accounts suddenly received a large amount of cash, they could be using it to try to hide money they don’t want to get divided up in the divorce.

Regardless of the methods used to hide money or assets, doing so is always against the law and can come with severe penalties in an Illinois divorce court. Whether your spouse is trying to hide assets so they don’t get divided up along with the rest of the marital property, or so they don’t go into the child support and/or spousal support calculation, you’ll need an experienced Illinois divorce attorney on your side.

The attorneys at Sherer Law Offices have been providing legal representation for real estate cases, criminal cases, and all types of family law for more than 25 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

How to Handle an Ex Who’s Also Your Roommate

ex who’s also your roommateMoving in together is an exciting time. You’re full of love and can’t wait to spend as much time together as possible.

But breakups are the exact opposite. Whether the separation is because of betrayal and mistrust, or just hurt feelings, your ex is usually the last person you want to see. Alternatively, maybe you do still want to see them, even though you know it’s not good for you. Either way, continuing to live with your ex can make it hard to move on, even if doing so is a financial necessity. To make it a little easier, we’ve come up with six tips on how you can handle an ex who’s also your roommate:

  • Set Boundaries

This is especially important for living expenses and household chores. Where you may not have kept track of who did what when you were a couple, one person leaving all the bills and/or work to the other after a breakup can lead to resentment, so set boundaries ASAP. Who’s going to pay which bills and who’s responsible for which chores?

  • Sleep in Different Rooms

This is a big one, for obvious reasons. Even if you’re sleeping in separate beds, sleeping in the same room is still very intimate, which is why you need to stop doing it as soon as you break up. If that means one of you sleeps on the couch, so be it. To keep things as equal as possible, you can even try to take turns sleeping on the couch, assuming your relationship is still strong enough to handle that kind of negotiation and you can both agree to a schedule and stick to it.

  • Don’t Bring Dates Home

Just don’t do it. You may have moved on, but they may not. Or they may be trying, but seeing you with someone else could set them back. It might be hard to talk (or even think) about dating when you’ve just broken up, but it’s best that you and your ex talk as soon after the breakup as possible about if/when you can each bring dates home.

  • Stop Doing Things Together

This can be tough if you’ve lived together for a long time and have an established routine. For example, you used to cook together, stop. The same goes for cooking for them or letting them cook for you. Once you’ve broken up, you’re both responsible for your own meals.

And certainly don’t drink together. While “grabbing a drink” might sound harmless, it can quickly lead to one or both of you overindulging, which can result in fighting and that just makes everything worse.

  • Set a Move-Out Date

Finally, you need to decide as soon as possible who’s moving out and when. Are you both moving out? Is one staying and the other leaving? If you bought a house together, that can make the situation even more complicated. Regardless of the obstacles, you need to find a way to work through them so you can live apart and start moving on with your separate lives sooner, rather than later.

  • Divide any property you have together.

This is where legal help may be needed, as jointly held assets between non-married couples may have to resort to filing legal action to divide that property.  Whether it’s a house, a car, or other items of property that are in joint names, you should speak to an attorney who is experienced in filing partition suits in the event you and your ex cannot agree on the division of your property.

The attorneys at Sherer Law Offices have been providing legal representation for real estate cases, criminal cases, and all types of family law for more than 25 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

What Is A Postnuptial Agreement?

postnuptial agreementYou’ve probably heard of a prenuptial agreement, in which the two parties entering into marriage sign a contract detailing what belongs to whom, and what is owed to each party in the event of a separation or divorce. Most people prefer to sign such a contract before the wedding to give them peace of mind before they legally merge their lives together.

But just because you didn’t sign a prenuptial agreement, doesn’t mean your financial situation is set in stone. Much like a prenuptial agreement, a postnuptial agreement can help provide peace of mind to one or both parties – the main difference being that it’s drawn up and signed after, rather than before, the wedding.

How Do You Know if You Need A Postnuptial Agreement?

There are a few reasons you and/or your spouse might want a postnuptial agreement. Most of the time they are used to protect one spouse’s marital property interests in the event the other spouse is embarking on a business venture that will entail a significant amount of risk. On the other hand, if one spouse suddenly came into a large inheritance, they may want to protect that asset in the event of a divorce, in which case a postnuptial agreement can provide that assurance.

Other times the couple may have wanted a prenup, but never got around to signing one before the wedding. In a time where more and more couples are comprised of spouses who both work outside the home, fewer people feel like the concept of communal property makes sense for their circumstances.

Alternatively, if two people get married and only then realize that they have very different ideas about how to handle money, a postnuptial agreement can help to save their marriage by defining which assets and properties belongs to which spouse. If you’re having marital problems, and you feel like your finances might be at risk because of it, a postnuptial agreement can allow you to focus on working on your marriage instead of worrying about your financial assets. Many people feel more comfortable working on relationship issues they may not otherwise have given a chance without a postnuptial agreement.

On the other hand, if you’re seriously considering divorce, a postnuptial agreement can save time and money in the divorce process by dividing property and assets ahead of time.

The birth of a child is another common reason people sometimes seek out a postnuptial agreement, especially if one or both of the spouses was previously married to someone else. A postnuptial agreement can clarify the child’s inheritance rights of property and finances from the current marriage and/or one or more previous marriages, if necessary.  However, you cannot pre-negotiate child support.

Previous marriages can also make inheritance tricky if one spouse dies, which is another common reason for seeking out a postnuptial agreement. In that situation, a postnuptial agreement can clarify who owns an asset in the event of a divorce or the death of a spouse.

There are many reasons for wanting a postnuptial agreement. Whether your circumstances have changed, or you just wanted the additional peace of mind a contract can bring, the family law attorneys at Sherer Law Offices are here to help.

The attorneys at Sherer Law Offices have been providing legal representation for real estate cases, criminal cases, and all types of family law for more than 25 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

What Does an Executor Actually Do?

executorWhen someone has a will drawn up and notarized, detailing what will happen to all their property after their death, they will usually specify in the document who will act as the executor of the will. If the document does not specify an executor, the court will appoint one.

But what does it even mean to be the executor of someone’s will? What, exactly, does that job entail?

Essentially, the executor’s job is to make sure the will is carried out as it is written. The assumption is that the will represents the intentions of the deceased at the time of their death – or at least the last time they were sufficiently mentally fit to decide what should happen to their possessions at the time of their death. The executor is tasked with fulfilling those wishes.

File the Will

The first thing the executor needs to do is file the will in the probate court of the county where the deceased lived. If they did not live in Illinois, then the will must be filed in the probate court of the county in which the deceased’s real property (such as land, a house, condo, etc.) is located. If they did not have any real property, then it needs to be filed in the county where most of the deceased’s personal property is located.  Once the will has been filed, the probate court grants the executor the powers of executor of the will, which allows them to fulfill the rest of their responsibilities.

Notifications

The executor is also in charge of notifying the heirs and legatees of the will that the document has been filed with the probate court – the legatees (also known as beneficiaries) are those listed in the will to receive something, while the heirs are those who would inherit the estate in the absence of a will.

Conduct Inventory

Under the Illinois Probate Code, an executor has 60 days from the time they become executor to conduct an inventory of the estate. The inventory must list all the real estate, personal property, and money owned by the estate.

Defend the Will

Once the heirs and beneficiaries have been notified that a will has been filed, they have 6 months from the time the will has been filed to challenge the validity of that will.  If the court finds the will invalid, the executor would be the one to file an appeal on that decision, if they decide to do so.

Manage the Estate

Before the will can be executed (and/or while it is being contested) there may still be bills that need to be paid on behalf of the estate. For example, if any real estate is included in the will, property taxes and/or mortgage payments may need to be made before the property is transferred to the ownership of the heir or legatee. The executor will be responsible for using funds and assets from the estate to make such payments, which is why it is of the utmost importance to assign an executor who can be trusted with this responsibility.  The executor has a fiduciary duty to the estate and the heirs and legatees to maintain the estate assets until such time as they can be distributed in accordance with the decedent’s wishes.

If you haven’t yet had a will drawn up for your estate – or you want to revise an existing will – you need a law firm you can trust. We can help you draft an air-tight will to ensure all your property and assets will go where you want them to go.  If you have been named the executor of an estate, we can also help you fulfill your duties in a timely, cost-efficient manner.

The attorneys at Sherer Law Offices have been providing legal representation for real estate cases, criminal cases, and all types of family law for more than 25 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

How Long Does the Divorce Process Take?

How Long Does the Divorce Process Take?How long the does the divorce process take? That depends on a lot of factors, including how complicated the division of assets is (how many assets, children, pets, etc.) and how well you two cooperate in the divorce process. If one spouse decides they want to drag it out, they can make it last years.

The Requirements

First, there are some requirements you need to meet before you can even file for divorce. These include the fact that, under Illinois law, you or your spouse need to have lived in Illinois for at least 90 days before you can file for divorce in Illinois. If children are involved, that limit goes up to 180 days. If for some reason you don’t meet the time limit and you can’t wait, you’ll have to file in another state.

In Illinois, the only remaining grounds for divorce is irreconcilable differences.  Under Illinois law, if you and your spouse have been living separate and apart for 6 months, irreconcilable differences are presumed. If you have not been living separate and apart for 6 months, you can still file for divorce, but you must allege that irreconcilable differences have arisen and prove same.

Uncontested Divorce

The best-case scenario is when you and your spouse can both agree that divorce is in everyone’s best interests, and you can agree on things like the division of assets, spousal support, and parenting time. These divorces can be completed in as little as two weeks, but more commonly take a month or two.  If there are children involved, both parties must complete a parenting class prior to the entry of the final judgment.

Contested Divorce

When you and your spouse can’t agree on one or more of the important factors in the divorce, that’s known as a contested divorce and it can take much longer – anywhere from 18 to 30 months and on. Each issue that you and your spouse can’t agree on needs to be determined by a judge, and each time you need to go before a judge to argue your case extends the time it will take before the divorce can be finalized.

Divorce by Publication (Default)

Maybe things have deteriorated in your marriage to the point where you don’t even know where your spouse is currently living. If this is the case and you want to seek a divorce from this person, you’ll need a divorce by publication, which requires a few steps.

First you need to attempt to notify the spouse of your intention to divorce them. If you don’t know where they are, you can publish a notice of your intention in local newspapers in the area where they were last known to reside.

You also need to do everything you can to try to locate your spouse. This might include things like calling their friends and family, their last known residence/landlord, employer, etc. There’s no definition for the things you need to do in order to prove you made an effort to reach your spouse, but you do need to provide sufficient evidence that you did everything in your power to reach them. This process could take months.

The missing spouse needs to be given a reasonable amount of time to respond to the notice of your intention to divorce them, but if they fail to respond, then the court will grant your divorce. At that point, you will need to publish notice of the divorce in all the local papers in the area where your spouse was last known to reside.  After publishing the notice once a week for three weeks without a response, the court will deem the divorce to have been finalized.

The Attorneys

Unfortunately, some attorneys will take advantage of the friction in divorces and drag out the process, so they can bill more hours on the case. We never do this. Our job is to serve you and make the process as easy and painless as possible. If you’re considering getting divorced and you need a family law firm you can trust, reach out to us today to schedule a consultation.

The attorneys at Sherer Law Offices have been providing legal representation for real estate cases, criminal cases, and all types of family law for more than 25 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

Who Gets to Keep the House?

Who Gets to Keep the HouseWho gets to keep the house is often one of the most highly contested aspects of a divorce. Not only is it the largest piece of marital property, but it’s also where the couple made a home together. Many people might want to keep the house, not for its value, but for sentimental reasons, or because it’s the only home they’ve known for the past several years, or even decades. On the other hand, others might want nothing to do with a house that is now tainted with negative associations of an unhappy marriage, but they may need the house as a financial asset to help them get back on their feet after the divorce.

Try to Reach an Agreement

The ideal situation is always to talk with your spouse about what you want and why. Have an honest conversation about what each of you wants and needs from the divorce and how the house plays into that. Maintaining honest communication with your spouse is especially important if you decide to divorce through mediation or work together to come up with a divorce settlement that works for both of you.

Marital Property

The first thing to determine is whether the house can be considered marital property. In most cases the answer is yes, since newlyweds tend to buy a house together shortly after getting married and/or people move into new homes together after they’ve been married for several years. If one spouse owned it prior to the marriage, but the other made mortgage payments and/or other significant contributions to the maintenance of the house, or additions or projects that significantly increased its value, then it could give that spouse certain rights to seek a monetary award from the home.

But not all marital property is split 50/50 under the Illinois Marriage and Dissolution of Marriage Act. Instead, it gets divided based on several factors, including, but not limited to, the level of contribution by each spouse to acquiring and maintaining the property, the duration of the marriage, other property the parties will be receiving in the divorce, as well as their needs following the divorce.

Factors that Tend to Be Considered When Deciding Who Gets the House

That said, there are also other factors that play into the decision regarding which partner gets to keep the house. For example, if children are involved, the partner given the most parenting time in the divorce usually gets the house so they can keep living there with the kids. Divorce can be especially hard on children, and most judges are sensitive to the fact that letting the kids stay in the same house with one of their parents can help them adjust to the big change. Allowing the kids to stay in the house also means they don’t have to switch to a different school district or leave their friends behind, which is good for them, not only because it means minimizing the changes they have to go through, but also because they have a support system in place to help them deal with the stress of the divorce.

Sometimes the decision is less one of “who gets the house?” and more one of “who gets to stay in the house for now?” For example, if there are children involved, and the partner with the most parenting time gets to stay in the house with the kids, judges have been known to allow them the first opportunity to stay in the home. However, this is dependent on other factors, such as that spouse’s ability to refinance the mortgage, if the loan is in both names, and for that spouse to be able to afford to pay the mortgage following the divorce.

Regardless of whether children are involved, one spouse might be allowed to keep the house on the condition that they buy out the other spouse’s interest in the property. In a spousal support arrangement, the higher-earning spouse may be required to continue making mortgage, taxes, and/or insurance payments on the house, even if they no longer live there.

As you can see, divorce is a complicated situation and the more property is involved, the more complicated it gets. If you are getting, or considering getting divorced, contact our offices right away to discuss your options.

The attorneys at Sherer Law Offices have been providing legal representation for real estate cases, criminal cases, and all types of family law for more than 25 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

What to Do When You Have a Problem Tenant

problem tenantIt’s the situation every landlord dreads: you have a signed lease with a tenant for your property, they’re all moved in, and now they’re causing problems. Depending on the severity of the issues, a simple conversation is all that’s needed. Other issues prove more challenging, so we’ve come up with some tips on the best ways to handle a problem tenant.

Know the Law

The first thing you need to do is research the laws governing rental properties in your area. They vary by state and city, so be sure to get very specific in looking up all the laws that apply to your area. There are statutes designed to prevent landlords from taking advantage of their tenants, but there are also laws that protect landlords. Know your rights and know the rights of your tenants.

Update Your Lease

Ideally, you want to do this try to avoid any problems before they begin by including terms in your lease that define problem areas and what the consequences will be to tenants who don’t act in accordance with the lease agreement. The lease is a contract that defines the relationship between the landlord and the tenant, so it is of the utmost importance that you make your expectations clear in the lease.

In the event that doing so doesn’t successfully avoid problems, it can help you deal with problems when they do arise by laying down the groundwork and a procedure for how you should act if a tenant becomes a problem. If a tenant does become problematic, be sure to stick to your own policies and procedures when dealing with the problem.

Document Everything

This starts with the lease and should go all the way up to eviction (if it comes to that). You should also have your own incident reports people can fill out any time there’s a complaint, and keep in mind this should go both ways. While you’re documenting every time your tenant causes problems, you should also give them a chance to document complaints against you. Provide them with a report they can fill out and make sure you both keep a copy of that report. The report should also include if and how you handled the situation so you can avoid any surprises coming back to bite you.

Any time you get an email or text message from neighbors complaining about your tenant, keep all those emails so you have a record of complaints. Also keep emails and text messages exchanged between you and your tenant and keep notes of conversations and phone calls, even the positive ones.

Late rent payments, warnings, notices served, complaints, and maintenance requests should also all be carefully documented.

If the cops are ever called to come to your rental unit and there’s a police report, get a copy of that report.

Keep It Professional

Plenty of problem tenants have their share of sob stories, and while you should always be respectful and understanding, you are not there to dole out favors. You are there to run a business, and if they’re not holding up their end of the agreement, for any reason, you need to act in accordance with your policies and procedures.

If you have any other questions about how to handle a tenant who’s causing problems for you, don’t hesitate to contact an experienced attorney today.

The attorneys at Sherer Law Offices have been providing legal representation for real estate cases, criminal cases, and all types of family law for more than 25 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

What Can Be Included in A Prenuptial Agreement?

prenuptial agreementNot only is the divorce rate going up these days, but the rate at which couples are signing a prenuptial agreement has also been on the rise.

Although it has long been perceived as a measure to protect the wealthy from gold diggers, spouses of a wider range of incomes are now signing prenuptial agreements as a way to determine how their property will be divided in the event of a divorce. It essentially provides a blueprint for how debts, assets, and other financial matters will be handled within the marital estate if the marriage ends.

Rather than a sign that trust is lacking in the relationship, one could think of a prenuptial agreement as a way to speed up the divorce process and even improve marital happiness by helping spouses avoid disputes over money and property.

Reasons for Getting A Prenuptial Agreement

Spouses generally want to consider signing a prenuptial agreement if they have any personal or otherwise pre-marital property they want to protect from the possibility of getting touched during divorce. This includes any property the person owns, including real estate, a retirement account, and/or their business(es) if they’re a business owner. These agreements can, and often do, involve property the spouses expect they will receive after the date of the marriage, but that both parties agree will remain, for all intents and purposes, that spouse’s sole property.

Children from a prior relationship are also a big motivator for many people to get a prenuptial agreement, as many parents will want to protect any assets or funds the children might inherit. A prenuptial agreement can define what property will belong solely to that spouse and his or her specified beneficiaries.

What Cannot Be Included In A Prenuptial Agreement

While a prenuptial agreement can avoid many of the “classic” disputes people think of during a divorce, a prenuptial agreement cannot determine a party’s obligation for child support. Child support belongs to the child, and the child alone, and as such, public policy in Illinois indicates that it cannot be contracted in advance or given away by a parent. Because children’s financial needs change depending on their age and circumstances, it is impossible to determine ahead of time how much (if any) child support they may need by the time the couple gets divorced, which could be any number of years in the future, if it happens at all. This is the same rationale behind the policy prohibiting spouses in a divorce from entering into an Agreement that no child support will ever be owed to the other parent and/or that a child support amount cannot be modified in the future.

The same goes for custody of children. If a couple does get divorced, a judge will determine what is best for the child at that point in time.

Dividing Marital Property

Any property a person owns prior to getting married is generally considered their personal property, and it will most often be returned to them by a divorce judge even without a prenuptial agreement. To the contrary, property and assets acquired during marriage are presumed to be marital property regardless of how they are titled, and that’s where divorces can get contentious. In order to avoid such a mess, a prenuptial agreement can decide ahead of time how marital property will be divided in the event of a divorce.

Things That Are Commonly Included In Prenuptial Agreements

In addition to protecting personal property, assets, and debts, prenuptial agreements can determine the following:

  • A spouse’s right to use, manage, transfer, sell, or dispose of property during marriage
  • Alimony that will be paid by a spouse after divorce, including the amount and duration of payments
  • A spouse’s right to ownership of death benefits from their partner’s life insurance policy
  • A spouse’s requirement to create a will that will carry out the terms of the agreement; and
  • Which state laws can be applied to the contract in the event of divorce.

Enforceability

A prenuptial agreement is there to give both parties peace of mind, but there are certain requirements the contracts must meet in order to be enforceable in each state. Whichever state’s marriage law you decide will apply to your prenuptial agreement, make sure the contract abides by all of that state’s requirements for prenuptial agreements. The timing and execution of a premarital agreement is also an important consideration, as an agreement made under coercion or duress will be held unenforceable by the Court.

The attorneys at Sherer Law Offices have been providing legal representation for divorce cases, as well as all types of family law for more than 20 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

How Does Divorce Affect Your Credit Rating?

Credit RatingDivorce does not directly affect your credit rating. There’s no factor for divorce or marital status when calculating credit, but divorce does cause a lot of upheaval, specifically to your finances.

As if the stress of ending a marriage wasn’t bad enough, the impact of the financial strain that tends to result can hurt your credit score. Going from two incomes to one can make it hard to pay all your bills on time, and if you fall behind, that will hurt your credit.

The first thing you need to do when separating from your spouse is to come up with a new budget that takes into account your reduced income. If you’re expecting any child support or alimony as part of the divorce settlement, do not include it in your budget. Many spouses avoid making these payments as a form of revenge against their ex-spouse, regardless of what the court order says, while others are simply unable to make the payments due to their own financial circumstances. Either way, you’re better off not depending on that income.

Joint accounts that have both your name and your ex-spouse’s name can also be problematic, as can shared debt. Judges generally assign one spouse to be responsible for handling the account/debt, but your credit score doesn’t know that, nor does it care. As long as your name is on that account, your credit score will be affected by it. In some cases, when divorces get nasty, people will intentionally avoid paying off debt in order to hurt their ex-spouse’s credit rating. Of course, doing so also hurts their own credit rating, but people rarely act rationally when they’re hurt and angry.

For this reason, you will want to keep track of all accounts that bear your name, even if you’re not the primary account holder. It’s a good idea to at least make the minimum payments, then ask the court to order your ex-spouse to reimburse you for those payments.

Remember that joint accounts aren’t the only accounts that can affect your credit score. Any accounts on which you are listed as a cosigner or authorized user can also be used to hurt your credit score. Make sure all your accounts are in order when going through a divorce, and leave no stone unturned when making sure your name is only associated with the accounts for which you are directly responsible.

For this reason, when dividing up assets and responsibilities in the course of a divorce, it’s best to get one name completely removed from any joint accounts you held with your spouse during the marriage. Whether that means getting your name removed from accounts for which they are now responsible or vice versa.

Alternatively, you can simply close those accounts (both over the phone and in writing, and make sure you have a copy) and ask them not to reopen the account. The best way to regain total control of your finances after a divorce is to make sure your name is only associated with the accounts for which you are responsible, and that the accounts for which you are responsible bear only your name.

The attorneys at Sherer Law Offices have been providing legal representation for divorce cases, as well as all types of family law for more than 20 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

Dividing Property That Is in A Trust During Divorce

Dividing PropertyAny property acquired during the marriage is generally considered marital property – meaning both parties have an equal claim on the property – but that’s not always the case with trusts. A trust is a piece of property that is managed by a trustee for a beneficiary. The piece of property funding the trust can be anything from cash to real estate.

There are a variety of reasons someone might want to create a trust. In some cases, they may just want to avoid paying taxes on the property, or they may want to pass it along as an inheritance while avoiding going through probate court. Protecting certain assets from spouses in case the marriage doesn’t last may be the reason behind creating a trust, or it may just be a benefit if that sad day comes.

Trusts received as a gift or part of an inheritance are generally considered separate (non-marital) property, rather than marital property, under Illinois law.

Trusts acquired before marriage are generally not considered marital property unless the funds have been distributed and commingled with marital property. For example, if any funds from a trust had been deposited into a joint bank account shared by both partners, then it would be considered to have commingled with marital property, in which case a judge may consider the trust marital property when dividing assets.

Any property or assets acquired during divorce is generally considered marital property, regardless of whose name is on the title or listed as the beneficiary. This can be true of trusts as well, but there are some exceptions, namely the revocable trust.

Trusts can be revocable, which is when the grantor (creator of the trust) reserves the right to cancel the trust at any time. Beneficiaries of revocable trusts cannot access funds from the trust, which is one way for the grantors of trusts to help provide for a loved one while keeping the funds safe from that loved one’s spouse or ex-spouse.

Sometimes a spouse will create a trust and name the other spouse as the beneficiary as a way to leave something to the beneficiary if something were to happen to the grantor first. Such a trust can be created out of either marital or non-marital property, but either way, once divorce proceedings have begun, the trust is usually revoked and the property reverts to its previous status as either marital or non-marital property.

But most revocable trusts are not automatically revoked in the event of a divorce under Illinois law. If the property used to fund the trust was marital property, then the trust can be revoked in order to finish dividing the marital assets, but any trust assets that were not already set to go to an ex-spouse will automatically be revoked.

If the grantor is the one getting divorced, then all provisions of that trust pertaining to the grantor’s spouse, and which are revocable by the grantor, do get revoked. This includes any gifts or interests in property.

Although the beneficiary of a divorce may succeed in keeping all their rights to that trust secure, if there are children involved, the value of that trust will be included when calculating child support and/or spousal maintenance (alimony).

The attorneys at Sherer Law Offices have been providing legal representation for divorce cases, as well as all types of family law for more than 20 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests. 

The choice of a lawyer is an important decision and should not be based solely on advertisements. See additional disclaimers here.