Finances and divorce

Illinois couples who are getting a divorce may be concerned about the state of their financial affairs. However, they can begin to take control of their lives by being proactive and getting a handle on their liabilities, income, expenses and assets.

The different types of financial assets individuals can have may include checking accounts, certificates of deposit, cash, mutual funds, real estate investment trusts, savings bonds, money-market accounts, savings accounts, stocks and bonds. The spouses who have a low income or are not working may find these assets particularly beneficial as they can be helpful in paying for living expenses.

Individuals should keep in mind that not all of their assets will receive the same tax treatment. Distributions from retirement assets will be taxed, and in certain situations, there may be a penalty that will have to be paid as well.

Normally, the individuals who retain the real estate property will be responsible for any debts or mortgages associated with it. However, in the eyes of creditors, both spouses will be responsible for the debt regardless of what is stipulated in the divorce decree.

Credit cards are another financial issue divorcing couples have to consider. Both spouses should be aware of the balances on the cards and whether the non-debtor will still have the authority to charge on the cards.

Both parties should also have copies of all joint returns from the last five years as they may be helpful in calculating the cost basis of assets that are kept. The tax implications of the divorce settlement terms should also be considered.

A divorce attorney may work to ensure that his or her clients achieve their desired divorce settlement terms, particularly those pertaining to their financial assets. A lawyer may protect the interests of his or her clients during negotiations regarding the division of financial assets.