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Divorce

  • Balancing the budget after divorce

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    Divorcing couples in Illinois face many major life changes when they decide to end a marriage. The disruption of such an important relationship causes the need for important choices regarding child custody, division of marital assets and how to best create a new lifestyle that works for both parties.

    One of the most significant impacts of divorce is caused by the changes in financial standing for both spouses. In order to maintain a semblance of the lifestyle that was enjoyed before the divorce, individuals should work to uphold a balanced budget that takes into consideration the many new expenses that are often faced after a divorce.

    Lower expectations 

    Dividing an income in two can have a big affect on both spouses. When both are used to a certain standard of living, it can be difficult to change expectations. The parent who has child custody often faces difficult decisions about cutting back on expenses for his or her children. Most parents do not want their children to suffer for the divorce of their parents’, preferring to continue paying for the same things as before, despite a limited income. Divorced couples should remember that because their finances will not be the same as they were before the divorce that their lifestyle expectations will have to be lowered, even in regard to the kids.

    Pay for responsibilities 

    When creating a new budget after a divorce, it is essential that spouses consider the legal responsibilities that they have. If a spouse is required by the court to pay child support, that financial responsibility should be part of his or her budget. Neglecting to pay child support can have serious legal ramifications in Illinois, including being held in contempt of court or having a driver’s license suspended.

    Stay in the loop 

    Some couples prefer to have as little contact as possible following a divorce, but it is often financially beneficial to maintain a working relationship, if possible. Over the course of a marriage, many spouses build up debt through the purchase of vehicles, homes and other big-ticket items. When a spouse chooses to ignore debt, it can ruin the credit of the other party. It is important to take accountability and build debts into a post-divorce budget in order to avoid creating credit problems for both spouses.

    From the addition of spousal support to divided mortgage payments, many budget items change after a divorce. By becoming more flexible and altering lifestyle expectations, divorcing couples are better able to get used to their new lives and financial needs.

  • How does Illinois’ equitable distribution law work?

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    One of the most difficult parts of divorce for many couples is the property division process. From the house and cars to valuable furniture, everything must be divided between divorcing spouses. Because Illinois is an equitable distribution state, how a couple’s property is divided during the divorce process is determined by how the court sees fit.   

    Determining factors 

    There is no set rule that determines which spouse receives which assets during the property division process. However, according to the Illinois Marriage and Dissolution of Marriage Act, the court will divide the couple’s property depending on a variety of factors. These include the following:

    • The contributions each spouse made to increasing or decreasing the value of marital property
    • How long the marriage lasted
    • The standard of living established during the marriage
    • Each spouse’s earning currently and their ability to provide an income for themselves in the future
    • How old each party is and their current emotional condition
    • What contributions each spouse made to the other’s education, training or professional licensure

    The court will also take into account any other factors that they deem necessary while dividing a couple’s property. For example, a mother decided to stay home and raise her two young sons during her eight-year marriage. Her husband receives an annual salary of $500,000.During the property division process, she is awarded 60 percent of the marital estate and her husband receives the remaining 40 percent. Due to her limited earning capacity and absence from the workforce, she is awarded a larger portion of the couple’s assets.

    In contrast, a couple decided to end their marriage after three years together. Both spouses have full time jobs and do not have children. Since both spouses are able to support themselves individually, each spouse receives approximately half of the marital property.

    The valuation process 

    During the initial stages of the equitable division process, the court determines which assets are considered marital property and which items are separate property. Then, each asset and debt is assigned a value. After this is done, the court divides the property between each spouse.

    The property division process can be an extremely challenging aspect of getting divorced for couples. Since courts do not abide by a specific set of rules and instructions for dividing property, it may be difficult to know which assets will be awarded to which spouse. Divorcing couples who desire to know more about how their property will be divided during the process may benefit from consulting with an attorney who can provide guidance at this time.

  • How new health care insurance options affect divorce in Illinois

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    Prior to the enactment of the Affordable Care Act, providing health care insurance after a divorce was cost prohibitive for many couples. Insurance coverage for children is typically covered under the policy of the employed parent, but when one spouse is dependent upon the other spouse, that spouse often loses those benefits in the event of a divorce. This is due to the fact that health care insurance policies are only written to cover current spouses.

    Generally, people who become ineligible for health insurance under their ex-spouse’s policy have been able to qualify for COBRA insurance for up to 36 months. COBRA allows people to purchase insurance coverage in the same insurance group for a predetermined period of time. The cost of this type of insurance, however, can be as much as 102 percent of the group rate that the spouse may have been paying. This high cost is startling to some, and was often the cause for many women opting to be uninsured after a divorce, according to a 2012 study conducted by the University of Michigan.

    Insurance assistance

    Under the Affordable Care Act, an unmarried individual would be able to qualify for insurance cost assistance subsidies. This allows them to not have to suffer from having high monthly COBRA rates. The types of assistance available beginning January of 2014 include the following:

    • Subsidies – A household that makes up to 400 percent of the federal poverty level, which is $45,960 for a single person, would qualify for a subsidy in the form of a tax credit.
    • Set premiums – Insurance providers must provide insurance despite prior medical conditions. This means that a spouse who has lost health coverage due to divorce will not be charged more for insurance simply because of a pre-existing condition.
    • Minimum standards – Those who are covered by an insurance plan may now expect that their policy will include coverage in emergency rooms without prior authorization, rehabilitative services, and basic dental care.
    • Annual Caps – This type of insurance will ensure that there is a reasonable cap on out of pocket medical expenses each year.

    With the changes in federal insurance law, people who may have previously relied on health care provided by their spouse’s employer may be able to afford quality insurance that is not as expensive as in the past.

    Health care costs after divorce 

    The costs of health care often have a large bearing on the size of divorce settlements or maintenance to be provided. A qualified family law attorney can help those struggling with health care decisions to negotiate for a settlement that will help them cover the costs of their care.

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