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. 

Understanding Why A Do-It-Yourself Divorce Is Dangerous

do-it-yourself divorceThere are some projects where it might be practical to DIY – divorce is not one of those projects.

As wonderful as the internet is, it does not, in fact, contain all the answers. Conducting an internet search of the marriage laws in your state does not give you an idea of how those marriage laws actually play out in the courtroom. And TV courtroom dramas are nothing more than entertainment and are not meant to give the impression that being an attorney is easy and anyone can do it.

As appealing as it might sound to be able to pay a single, small fee for all the legal documents you’ll need for your divorce, if something sounds too good to be true, it probably is. There’s no denying the fact that attorneys cost money and many people getting divorced are afraid they can’t afford it. But the fact is they can’t afford not to hire an attorney to help them with their divorce.

When two people have been married for any length of time, they have formed a life together. They have combined not just living space, but assets and possessions. If they had children together or were jointly raising children from a previous relationship, those children will be heavily affected by the divorce, and they deserve more than a packet of documents off the internet.

More often than not, trying to save money with a DIY divorce backfires, sometimes to the point of one partner having to file for bankruptcy after the divorce. If you weren’t trained to defend your case in a courtroom, you won’t be properly equipped to represent your best interests. Even if there’s no one more motivated to protect your rights than you, that doesn’t mean you know the best way to go about doing so in a courtroom.

By insisting on a DIY divorce, you could unintentionally get a bad deal for yourself when negotiating settlements and end up with a far smaller settlement than an experienced divorce attorney could have gotten for you. If children are involved you could end up with less parenting time and/or less child support than you are owed.

And are you aware of the developing laws regarding pets in divorce? Some state divorce laws are starting to treat pets more like children (since their owners certainly do), but Illinois still treats pets like property – meaning, if you both acquired the pet during the marriage, the pet will be divided along with the furniture, heirlooms, etc. If you and your spouse acquired a pet together, and you want to make sure the pet stays with you, you’re going to need a competent divorce attorney on your side.

Many couples who try a DIY divorce end up back in the courtroom a year or two later to sort out all the things their DIY divorce missed or failed to handle properly. That costs more time and more court fees. Further, they’ll probably end up having to pay the attorneys’ fees they were hoping the DIY divorce would avoid, only now the fees will be much higher because the attorney will require more time, effort, and resources to sort out the mess made by the DIY divorce. Obtaining your rightful property may also be impossible if you’ve already given it away, as property settlements are generally not disturbed 30 days after the Judgment. Bottom line: it is easier and less expensive to do it right the first time.

Finally, don’t ever assume that a Court will just accept the settlement that you and your spouse come up with in your DIY divorce. More and more judges are refusing to enter divorce agreements that are based on online forms, even the ones the parties paid for using an online document servicer/generator. This is not because Judges prefer to have attorneys, but rather because the Judge can usually identify the problems with the documents or potential pitfalls with the parties’ agreement. So, by rejecting the documents and advising the parties to go seek an attorney to review them, the Judge is actually helping the parties by avoiding a situation where one or both of them has to return to Court down the road to fix the problems.

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 Pension and Retirement Benefits During Divorce

Dividing Pension and Retirement Benefits During DivorceWhen considering what they’re entitled to in a divorce, most people think of dividing up the bank accounts and the property. Few of them think of the pension, 401k, or other retirement plan, but they should.

In most states (depending on the relevant marriage law) all pension money earned during the marriage is considered an asset that belongs to both parties and should be divided accordingly. Along with the rest of the estate, the pension benefits can be divided at the time of the divorce. The court can issue an order (known as a domestic relations order) for the pension plan to make payments to a former spouse, in which case they’ll be listed as an Alternate Payee.

Most pension plans will pay benefits directly to an ex-spouse if the domestic relations order meets certain criteria. If there are survivor benefits on a pension, payments can be made for the life of the employee and even after, regardless of whether they die before or after retiring. But everything is dependent on the prevailing local law, so check your state, county, city, and village requirements if you’re getting divorced and want to know your chances of getting your share of your spouse’s pension. Illinois allows both court orders and model court orders.

But the federal Employee Retirement Income Security Act (ERISA) controls all corporate-defined retirement plans, as well as certain defined contribution plans, and it pre-empts any state court orders. If a domestic relations order meets the requirements laid out by the ERISA, it becomes known as a Qualified Domestic Relations Order (QDRO). A plan administrator can determine whether a particular retirement plan fulfills all the criteria for a QDRO.

Government and military plans are exempt from ERISA, but they have their own regulations. Government pension plans involved in a domestic relations order that meet the necessary requirements are also referred to as QDROs.

The criteria for qualifying as a QDRO include things like the need to state the amount or percentage of the benefits to be paid to the Alternate Payee (or at least the manner in which that amount or percentage is to be determined). They also require a specific number of payments or the time period to which the order applies.

There are also limits on what QDROs can do. For example, they cannot require the plan to pay any benefits in any option that is not already offered by the plan. They also cannot require the plan to pay benefits that are worth more than the value of the Primary Participant’s interest (an actuary will be needed to determine that number); and they cannot require payment be made to an Alternate Payee that has already been set aside to be paid to an earlier Alternate Payee.

The first thing that needs to be done when claiming a right to part of a spouse’s retirement plan is to determine the value. That’s easy for a contribution plan, such as a 401k or IRA, because the current value gets reported to the account holder in statements that are provided either monthly, quarterly, or annually. But determining the value for a corporate-sponsored pension gets a little trickier.

In all cases involving the division of retirement accounts, it is important to consult with an attorney who is experienced in family law and the preparation of these Orders. Because the Orders entered with the family Court must often lay out the key information for the execution of a QDRO, the drafting of the Judgment for Dissolution and/or any settlement documents is just as important as the preparation of the QDRO itself. A certified copy of the divorce judgment must be sent to the Plan Administrator with the QDRO in order to finalize the division of the account, so the terms of both must match.

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. 

 

What I Need to Know If This is My Second or Third Marriage

second or third marriageThere is no doubt that marriage is harder than ever. A new bride will gain more than a husband, as if the groom has been married before, the bride might find herself married to his alimony and child support payments as well. A groom might suddenly be a stepfather if the bride has children from a previous marriage. These are just some of the reasons to need to approach another marriage very carefully, and be aware of some of the unique financial situations that arise for second marriages.

More than 40% of weddings involve a bride or groom who has been married before. While most of these couples pay attention to their wedding budget, most don’t take time to discuss the financial issues that will have a larger impact on their relationship. These include situations where one spouse owns assets awarded in a prior divorce, or more commonly a when either spouse is supporting children from a prior marriage. You need to address these issues before you tie the knot and understand how they will impact your life together. It will be the best thing for your relationship.

Consider a Prenuptial (or Post-nuptial) Agreement

A prenuptial agreement lets you and your new spouse agree how your assets, no matter when they are acquired, will be distributed if you divorce or pass away. This agreement can be done after the marriage or before, but it’s better to take care of it before you get married.  The ideal time to begin discussing this in during your engagement, well in advance of the wedding day. The reason being that there are laws that allow a spouse to later challenge a prenuptial agreement if that agreement was made close to the wedding and the spouse claims he or she was under duress.

It is also not uncommon for people getting married for a second or third time to want to determine the allocation of expenses during the marriage. Sometimes, a couple will want even to establish the division of property and the payment of any alimony should the marriage end in divorce. These things can be addressed in the prenuptial agreement that your experienced family law attorney can prepare for you.

Will Revision

In many states, a surviving spouse has an interest in the estate of their deceased spouse, regardless of a provision of a will. People in second marriages often prefer that some of their assets transfer over to their children from their prior marriage, and or such an arrangement was actually agreed to within their prior divorce. For example, many couples will agree that they will maintain life insurance policies naming their children as beneficiaries, or they will award certain items of property to their children. This can be a part of the prenuptial agreement. You should consult with an experienced estate planning attorney to make sure your assets will be divided per your wishes. Make sure that your will is current and has an updated medical power of attorney.

Non-Marital Assets

Assets gained prior to a second marriage are non-marital. If there is proof they are non-marital and have not been combined with marital assets, they will not be distributed in the event of a divorce. Some tips to protect and maintain your non-marital assets are:

  • Keep your marital and non-marital assets completely separate
  • Use only marital funds during your second marriage to purchase new property that you intend to share with your new spouse
  • Keep your non-marital assets or accounts titled in your own name, and do not apply any of your new marital funds to those assets or accounts
  • Keep detailed records of your non-marital assets

With so many factors needing to be considered before a second or third marriage, it is best to consult with an experienced family law attorney. At Sherer Law Offices, we have the knowledge and expertise to guide you through the prenuptial process.

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What to Do When an Executor Fails to Carry Out the Will

carry out the willAn executor’s job is to carry out the will, meaning he or she will execute the will and handle the estate of the deceased by carrying out their wishes. This can include paying debts and taxes and distributing the assets to the beneficiaries in accordance to the instructions of the will. It is the responsibility of the of the executor to do these things in a timely manner, and act in the best interest of the beneficiaries.

But what happens if the executor isn’t doing their job? Can they be removed from their position? There are many things you should do if you find that the executor isn’t doing their job properly.

Know the Timeline to Settle an Estate

When a loved one passes away, you probably start to wonder how long it takes between the time the will is read and when you will get your inheritance. It depends on how complex the estate is, and the process can take anywhere from a few months to a few years. The executor can only disperse the assets of the estate after the property is evaluated and all the debts and taxes have been paid. The executor can be held personally liable if the inheritances are paid first and there isn’t any money left to cover debts and taxes.

Determine If You Have a Case

You should first try talking to the executor about your concerns. If that doesn’t work, you may have to take legal action.

To have an executor removed from an estate you need to be able to show that they are not living up to their responsibilities of their job or that they are doing something that isn’t legal. The court may remove an executor for the following reasons:

  • They are no longer eligible because they have been convicted of a felony after being named executor
  • They are no longer suitable because they have a conflict of interest
  • They have failed to carry out the wishes of the deceased or they haven’t done anything at all
  • They mismanage the estate by stealing from the estate or wasting assets

The executor must commit a serious infraction for the court to act. Taking a long time to settle the estate is not considered a serious infraction on its own. It must be in addition to one of the examples above. In most cases, you must wait a little longer to get your inheritance.

Seeking Legal Recourse

If you believe that the executor is not living up to their duties, you have two legal options: petition the court or file a civil lawsuit.

Beneficiaries can petition the court to have the executor removed from their positon if they can prove they should be removed for one of the reasons listed above. The court will have a hearing where the parties involved can tell their side of the story. Afterwards, the court can remove the executor and appoint another one if they find just cause.

Your other option is to file a civil lawsuit against the executor if you can prove that you have suffered due to their actions, or lack of actions. For instance, this would be an option if the executor has stolen money or failed to protect the assets of the estate. There is always a chance you will be able to settle before ever seeing the inside of a courtroom.

No matter where you are in the process of settling an estate, you need to speak to a qualified estate planning attorney if you have any concerns at all. At Sherer Law Offices, our attorneys will advise you and guide you as to what to do if you find yourself in this difficult situation.

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Why Contract for Deed is Good for the Buyer, Bad for the Seller

contract for deedA contract for deed is an agreement for buying property without going to a mortgage lender. The buyer agrees to pay the seller monthly payments, and the deed is turned over to the buyer when all payments have been made. It is simpler and cheaper than getting a mortgage yourself, but it isn’t risk free.

Benefits for Buyers

If you are unable to qualify for a mortgage because of a past bankruptcy or lack of employment history, a contract for deed could be the right solution for you. If the seller is willing to do business with you that is really all you need. You will possibly have more freedom for negotiating a down payment and you won’t have to pay any closing costs, origination fees, or other fees that are involved with taking out a mortgage. With a traditional mortgage, if you default, the lender could demand you pay off the entire loan even if you make up all of the missed payments. A seller using a contract for deed doesn’t have that option, unless you agree to include that clause in your contract. Other benefits include: no loan qualifying, low or flexible down payment, favorable interest rates and flexible terms, and a quicker settlement.

Risks for Buyers

The biggest risk when buying a home contract for deed is that you really don’t have a legal claim to the property until you have paid off the entire purchase price. This means that if you default and can’t make your payments, you lose the property and all of the money you have already paid into it (often including repairs and improvements). Unlike a traditional mortgage, a defaulting buyer in a contact for deed may only have 30-60 days to cure the default or move out. Another major risk is that the seller can still encumber the property with liens and mortgages as they are not required to transfer good clean title until the completion of all payments under the contract. In addition there are also very limited disclosure/inspection rules which means that a buyer who doesn’t perform a thorough inspection of the home could end up with a home that has significant defects which require substantial repairs.

Benefits for Sellers

A contract for deed offers you a way to do business with a buyer who can’t qualify for a regular mortgage. The process is usually faster than a regular mortgage sale. If the buyer goes into default, you can terminate the contract right away without having to go through all of the legal procedures that are required for a mortgage holder to foreclose on a home. Other advantages include: no appraisal required, wider range of buyers, possible profit on financing, and quicker settlement.

Risks for Sellers

The biggest disadvantage of a contract for deed for a seller is that the property won’t be out of your name for many years. This quite possibly won’t suit your investment strategy. You will also be waiting until the contract is fulfilled to receive all of your money, instead of having an immediate payment of the total purchase price from a traditional mortgage company. Other risks include: the loan stays on your credit report, the seller is still liable for the loan, risk of non-payment by the buyer, and the buyer never goes through a formal application process like with a regular mortgage. In addition, the seller is still the legal title holder and if the buyer fails to keep the property up to code and ordinance requirements, the seller could be subject to fines, lawsuits and other legal problems as a result of same.

Flexibility for Both

The terms of a contract for deed are flexible, depending on what each party works out between them. The length of the contract and the amount of monthly payments are up to the buyer and the seller to agree upon. Depending on the exact terms, this flexibility could be a pro or a con.

 If you are the buyer or the seller of a home, and you chose to use contract for deed financing, you need to enlist the services of a qualified real estate attorney. At Sherer Law Offices, our attorneys will draft the appropriate disclosures and indemnities to protect all parties involved

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How to Purchase Investment Property That Has Legal Issues

investment propertySo, you have decided to make the biggest financial decision of your whole life by buying an investment property. However, you have concerns about the legal issues that others have had in recent years. Maybe the property is underwater, or the rental income doesn’t cover all of the expenses associated with the property, or maybe the mortgage payments have become unaffordable.

You aren’t alone. Even though those issues are there when buying investment property, there are many more. Despite the fact that these issues have been around forever, it is only recently that buyers have been getting better about doing their due diligence and taking the time to work hard to lower the risk on real estate. The process is really not that complicated, but it is time consuming. The following is a list of things that should be on your due diligence list to lessen the chance of something going wrong with your investment.

Understanding the Purchase Process

A buyer should have a complete understanding of the purchase process right from the beginning. Review the contract as early as possible before you sign it. Make sure you understand how to shop for the right property, make sure you know about making an offer, contingencies, appraisals, financing a mortgage, and when the earnest money deposit becomes “at risk”.

Does it Make Sense Financially?

Start by jotting down the deal. You need to determine the amount of cash you will invest and what rate of return you project to be earning. Bank CD’s pay 1%, Bonds pay 5%, while real estate is riskier. So what should you be earning? Five percent is the suggested amount. Farther down the road appreciation value may come up, and it will most certainly help, but let’s count the cash first.

What about buying vs renting? There are a few simple guidelines to consider. If you plan to own for less than five years, you should keep renting. You will not be throwing away money and it will be less stressful. Buying for the long term is the best move you could make. And don’t buy just anything to be buying something – buy the property you fall in love with that will make you happy in the long run.

Be a Smart Shopper

Are you hoping to grab a deal of a lifetime on a foreclosure or short sale? If you are after a great deal at an auction, it only wastes your time and energy chasing something that has little chance of success. Skip past the get-rich-quick schemes. Go with a more conservative approach and shop for a traditional sale.

Income and Real Estate Taxes

If you are buying to save money on your taxes, you should know that many couples guying under $300,000 get little in tax savings. People with a higher income and more expensive property get the bigger tax benefits. Meet with your CPA or an experienced real estate attorney to determine if there are any tax benefits you can earn.

Getting a Fair Deal Financing Your Mortgage

If you can get financing, it has become easier to get a fair deal because of the new federal regulations. Even so, you should understand your Good Faith Estimate and how to take it apart to make sure you get that fair deal. Mortgages are long term, so take the time necessary to talk to a couple of different lenders, understand your mortgage, and make a good decision.

Homeowners Association (HOA)

This is an item that most buyers don’t know to review. The finances and the operation of an HOA are becoming a huge risk issue these days. If you don’t take the time to review them and understand them, you may get a big surprise in the form of drastically higher fees or special assessments in the years to come. Meet with someone that can help you decipher them. A qualified real estate attorney can help you with that. The ultimate goal is to avoid a community where the HOA is in really bad shape.

Fix Up Costs and Home Inspections

One of the most important things you can do as a buyer is to have a home inspection done. During this process, you should be putting together a list of what needs to be fixed and/or replaced. You can then take your list to a home improvement store and get an idea of the total cost of bring the property up to your standards. This will also help you to negotiate and seller’s credits and/or terminate the deal if the costs are too high.

Title Issues and Lot Lines

This is another item people tend to neglect paying attention to. Even though the risk of an issue is very low, the loss potential is huge. Take the time to review your title abstract and the plat or survey of the property, then take a walk around the property. It could save you endless financial stress in the long term.

Buyer Beware!

If you take the time to learn the risk issues and do your due diligence before you purchase property, you can greatly reduce your risk of something going wrong. While it can be a lot of hard work, it will be much easier than trying to straighten out a big mess after you close the deal.

Investing in real estate is a huge step. At Sherer Law Offices, our experienced real estate lawyers will help guide you through the process to make your real estate investment as smooth as possible.

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Who Gets the Diamond? How Assets are Divided During Divorce

ringfIllinois law requires that property in a divorce be divided equitably, but that does not necessarily mean that it will be equal. Some couples agree on how to divide what they own while other couples need the help of an attorney or a mediator to come to a settlement.

Couples who are unable to come to an agreement will end up in court and ask the judge to make the decision for them. Sometimes an arbitrator will make the decision. A judge in Illinois will consider all of the factors that are relevant when making a decision about the division of property. Some of those factors include the effects of any prenuptial agreements, the couple’s occupations and ability to be employed, the length of the marriage, and custody arrangements for any children.

Separate Property vs. Marital Property

When dividing property, the first thing that needs to happen is differentiating between separate property and marital property. Separate property includes the property that either spouse owned before they got married. It also includes property that was inherited or received as a gift. Income from separate property is also included.

Marital property includes most of the debts and assets acquired during the marriage. Sometimes, separate property can be converted into marital property. This can be specified in a written agreement. A spouse might also change separate property into marital property by changing the property title from an individual title to a joint title.

Marital and separate properties are occasionally mixed together; this is called “commingling.” Couples might combine their property on purpose, or they may do it without even knowing it. For example, a bank account that one spouse has before the marriage can become marital property if the other spouse deposits money into it. A house that is owned by one spouse can also become marital property if the other spouse makes a mortgage payment or pays for any other expenses regarding the house. This can make things very complicated and require the help of an experienced divorce attorney.

Determining Value

After figuring out whether the property is marital or separate, the spouses, or possibly the court, will assign monetary value to the items. If a couple needs help with determining value, they can hire a professional appraiser. Things such as retirement accounts are difficult to evaluate and may require the advice of a C.P.A. or other financial advisor.

Property Division

Assets can be divided by assigning particular items to each spouse. There may be a need for an equalizing payment if one spouse gets considerably more than the other. They may also choose to sell a particular piece of property and split the money equally. Sometimes, they agree to continue owning the property jointly. For example, a divorced couple may decide to keep the family house until their children are no longer in school or keep it as an investment property with the hope that the value will increase over time. This is NOT recommended for couples who don’t get along, but it may be an advantage for couples who get along well and can remain friends after they are divorced.

If you have questions about the division of your property during a divorce, you need the advice of an experienced divorce attorney.

CONTACT Sherer Law Offices for a consultation.