Why And How To Establish an LLC

Establish an LLCIf you’re starting a small business, one of your first questions is probably whether you should establish your company as an LLC. It can be a bit of a bureaucratic nightmare and it’s another expense you have to consider, along with all the other costs associated with getting your business up and running (business cards, a website, etc. It all adds up). When you’re just starting out, you’re on a tight budget, which leaves you with the question: Is it worth it to establish your business as an LLC?

Protect Yourself from Liability

LLC stands for “limited liability corporation” and one of the main benefits of establishing your business as an LLC is to protect yourself from any personal liability in the event something goes wrong with the company. For example, if the company gets sued, they won’t be able to use your personal assets – only the company’s assets.

This is especially beneficial if you’re married. If you don’t establish an LLC and you get sued because of something related to the business, not only are your personal financial assets up for grabs, those of your spouse might be as well.

Taxes

An LLC does not have to pay federal taxes. This does not mean you and your employees and/or business partner(s) don’t get taxed for the income you bring home – it just means the business itself does not get taxed. That income gets distributed to all the members of the LLC, each of whom then has to pay federal and state income taxes on that money.

The reason it’s beneficial to not have the company itself get taxed is because not all of the money the business brings in will go straight into your pocket – there will be business expenses you’ll have to cover and it will give you peace of mind knowing you won’t have to pay taxes on that money before paying for things like rent and utilities for your office, not to mention your employees’ salaries. It also means you won’t have to pay the government twice by paying corporate taxes, followed by your own income taxes.

But just because you don’t have to pay federal taxes doesn’t mean you should forget about state taxes. Depending on where you live, your LLC might have to pay state taxes. For example, in Illinois LLCs do have to set aside 1.5% of their net income to pay the personal property replacement tax.

What Do I Need?

To establish your company as an LLC, you need to file an article of organization, which you can find at your local secretary of state’s office (these days you can probably find it on their website). Once you have completed the form, you need to file it with your secretary of state’s office in order for the LLC to legally come into existence.

Keep in mind that any mistakes on the form could result in a delay in getting your LLC established while you go over the form trying to figure out where you went wrong. This is why it’s so important to have a qualified attorney at least look over the form and help you file it. Ideally, they should be with you every step of the way so you can avoid do overs.

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. 

The information provided on this site is not, nor is it intended to be, legal advice.  You should consult with an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, emails, and communications.  Contacting our offices does not create an attorney-client relationship.  Please do not send any confidential information to us unless and until such time as an attorney-client relationship has been established.

Past results do not guarantee future results. Every case is different and is decided on its own merits. Any testimonials or endorsements regarding services do not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. 

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

What Does Divorce Look Like if You’re Over 50?

divorce over 50We all thought our lives would be set by the time we hit our 50s – that we would have it all figured out. But life doesn’t work that way. No matter what our age, there are always things that can surprise us, and that can include divorce.

Is Divorce the Same at Any Age?

Yes and no. The laws don’t change, but where you’re at in life has a significant effect on divorce proceedings. For example, one or both of you might have established careers and have compiled significant financial assets, all of which will have to be taken into account when dividing marital property.

If you have kids and one of you stayed home to raise them instead of working outside the home, that will have a significant effect on the spousal support the court will award. The parent that stayed home will find it hard to get a job because of both their age and how long they’ve been out of the workforce, so it’s possible that spousal support will be their only form of income.

Retirement

If you’re in your 50s, you’re probably starting to think about retirement – or you might even be one of the lucky few who managed to retire early. The reduced income you have in retirement could affect the amount of spousal support you have to pay, assuming you didn’t retire early (before age 65).

Social Security

If one spouse stayed home to raise the kids and take care of the house, they won’t have much Social Security of their own because they weren’t paying Social Security for all those years they weren’t in the workforce. In some cases, the court might award them a portion of their ex-spouse’s Social Security income, but only if they’re over the age of 62, have not remarried, the marriage lasted for at least ten years, and at least two years have passed since the divorce was finalized.

In general, retirement funds, such as 401k plans, IRA plans, and pension plans are considered marital assets if the parties contributed to the funds during the marriage, though there may be exceptions to this rule for things such as inherited IRAs or other inheritance or gifts.

Pension Plans

Pension Plans are also considered marital property (if earned partially or entirely during the marriage) and the Court typically awards each spouse a percentage of the pension plan.  A pension is divided though a Qualified Domestic Relations Order (QDRO), in which case the pension plan administrator will send the payments directly to each spouse when the plan participant qualifies to receive same. This ensure payments to each party in the proper form and amount and allows each party to be taxed only on his/her portion of the benefits.

Survivor’s Benefits

You also might want to consider trying to negotiate for survivor benefits. Most pension plans give their workers the option of reducing their retirement benefits for themselves during their lifetime so that more can be paid to their spouse after the employee’s death. This is especially common in cases where the wife stayed home while her husband made the money  or the wife earned far less than the husband during the marriage.  Women tend to live, on average, seven years longer than men. That makes for a substantial amount of survivor’s benefits, so it’s worth it to at least try to get it included as part of your retirement division agreement.

No matter what stage you’re at in life when you and your spouse decide to split, you need a qualified family law attorney on your side – someone who will listen to your story and come up with the best solution for your needs.

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 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. 

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. 

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. 

When Your Spouse Refuses to Participate in the Divorce Process

Spouse Refuses to Participate in the Divorce ProcessThe best-case scenario for a divorce is an uncontested divorce, in which both parties agree to the dissolution of the marriage and cooperate in the dividing of marital property and determining things like alimony and custody (if necessary). But sometimes one spouse refuses to participate in the divorce process, making it difficult to complete the divorce process.

Contrary to popular belief, you do not need both parties to sign the papers in order to finalize a divorce. All you need is to file a petition for divorce and make sure you can prove your spouse is aware of the petition. Further, you have to be able to show you gave them a chance to respond, and each state has their own time requirements before the Court will find someone in “default.” In Illinois, all contested divorce cases start by serving your spouse with divorce papers. If he or she does not respond within 30 days of receiving your petition for divorce, or otherwise file any motions with the Court, you can ask the Court to find your spouse in default and to set the case for hearing on a default Judgement. If your spouse does not show up to court on the appointed date, the court may decide to grant you a default divorce. By failing to respond or show up to court, your spouse forfeits their right to have a say in the divorce process or judgment.

However, there are some instances in which the spouse cannot be located. So long as you can attest to the Court that you have made all reasonable attempts to locate your spouse, you can get what is known as a publication by divorce, in which you publish notice of you your petition for divorce in the local media outlets of the last known whereabouts of your spouse. Your notice has to run a certain number of times before the Court will accept service by publication, so it’s important to check your local Court Rules or consult with an experienced attorney for the required procedure. If your spouse still doesn’t do not respond within 30 days, most courts will grant a default judgment.

If your spouse did file a response to your petition for divorce, but refuses to participate further in the process, the judge may proceed as though it is an uncontested divorce, but you might have to wait to be assigned a court date. If you get a court date and your spouse fails to appear in court on the appointed day, the judge may enter orders based on the divorce petition and response.

As always, a competent family law attorney can help with this process, as even seeking a default divorce can be stressful since there are specific rules you must follow. If your spouse thinks they can avoid divorce by simply refusing to sign the papers, a letter from your attorney can set them straight. When they see that the divorce can proceed with or without their cooperation, most people will choose to cooperate in the divorce. There are many reasons one might refuse to sign divorce papers, but an experienced family law attorney can usually ensure that the divorce proceeds according to your wishes.

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 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 the Basics of Real Estate Evictions

real estate evictionsMoney and personal property are both sources of contention in all sorts of relationships, so it’s no wonder why it can sometimes be difficult to find a landlord/tenant relationship that isn’t fraught with tension. It can be easy for each party to get frustrated with the other, but no matter how strong the temptation for retaliation might be, it’s important to remember that there are laws in place for real estate evictions to protect everyone involved.

Landlord Disclosures

Landlords are required by Illinois law to disclose specific information to tenants, such as how utilities will be billed if tenants are made to pay a portion of a master metered utility for the building. One common example is the water meter. This information would usually be included in the lease or rental agreement.

Security Deposit Restrictions

Most states don’t have laws that limit the amount landlords can charge for security deposits, but there is a limit on how long after the tenant moves out the landlord can wait before returning the security deposit. In some states, the limit might be 30-45 days after the tenant has vacated the premises. The range is to account for delays landlords might experience if they include an itemized statement and receipts, or if the tenant disputes any deductions made from the security deposit.

Tenants can take their landlord to small claims court for failure to return a security deposit. The law allows tenants to sue for up to $10,000. So, if you’re a tenant looking to sue for a missing security deposit, or a landlord looking to defend yourself against a suit for a missing security deposit, talk to an experienced real estate attorney in your area.

Rent

There are several state laws regulating rent, including the amount of notice landlords must provide their tenants before raising the rent, and how many days a tenant must be given to pay rent or move before the landlord can file for eviction.

Eviction

Despite the Hollywood image of landlords dumping tenants’ belongings on the side of the street, the law is very specific about how and when landlords can evict their tenants. First, a landlord must be able to prove that the tenant failed to abide by one of the terms of the rental agreement. Then the landlord must give the tenant a specified time period to move out before they can file for eviction. These laws vary from State to State, so it is important to consult an attorney if you need help with this issue.

Personal Property

The law lays out specific procedures landlords must follow when renters leave property behind after moving out. If you’re a landlord with this problem, be sure to check all the relevant state and local laws for your area before touching your tenant’s personal property.

Tenant Protections

Federal and state rental laws are also careful to protect the rights of tenants. In addition to fair housing laws that prohibit discrimination, special protections are usually granted to victims of domestic violence. The law also forbids landlords from retaliating against a tenant for exercising any right granted them under the law, for example, complaining about unsafe living conditions.

The attorneys at Sherer Law Offices have been providing legal representation for real estate 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.