4 Important Steps to Take When Preparing for Divorce

 Posted on November 03, 2023 in Divorce

If your marriage has broken down, you may be considering divorce. While ending a long-term relationship can be difficult, this may be the best option for you, your children, or others who are involved in your life. Rather than continuing to live in an unhappy marriage and subjecting yourself and your children to tension, conflict, and stress, you can take steps to end your marriage and move on to a more positive situation. 

While the divorce process can be difficult, being prepared can help make the transition smoother for you and your children. If you are considering a divorce in Illinois, it is important to understand the steps you should take to protect your rights and interests. By following these important steps, you can navigate the divorce process with confidence.

At Weiss-Kunz & Oliver, LLC, our attorneys can provide guidance on what you should consider as you prepare for your divorce. We have extensive experience representing clients in a wide variety of situations. Whether you expect high levels of conflict, need to address complex financial issues, or are prepared to work together with your spouse to negotiate a settlement that will be mutually beneficial, we can advise you on how to proceed and provide you with effective legal representation throughout the divorce process.

Gather Important Documents

Before filing for divorce, it is crucial to gather all relevant financial documents. These documents will help you provide accurate information about your financial situation. By compiling and organizing information about your finances, you can ensure that nothing will be overlooked when making decisions about the division of property and other financial issues.

To ensure that everything is properly documented and accounted for, it is important to gather the following key documents:

• Financial statements - Gather copies of all recent statements for accounts and other financial concerns. These may include bank statements, credit card statements, and loan statements. These documents will provide details about your income, expenses, debts, and assets.

• Tax returns - Get copies of your tax returns from at least the past three years. These will include both federal tax returns and state tax returns, as well as any other relevant forms related to the taxes you have paid, the deductions and credits you have claimed, and the refunds you have received. Tax returns and forms contain crucial information about your income sources, assets, charitable donations, and other relevant financial data.

• Pay stubs - Gather recent information about income for both you and your spouse. Pay stubs provide detailed information about your earnings, including salary, wages, commissions, and bonuses. They will also provide information about taxes, exemptions for dependents, and retirement contributions.

• Business and employment records - If either you or your spouse owns a business or has self-employment income, you will want to gather any relevant business records, including profit and loss statements, gross receipts, details of expenses, and balance sheets. These records can shed light on a business owner’s earning capacity and the value of business assets. Business records may also provide information about employment agreements for one or both spouses, salary and benefits earned, equity interest and profit sharing arrangements, etc. 

• Real estate documents - If you or your spouse own your home or any other real estate properties, gather copies of property deeds, mortgage documents, and information on any outstanding loans or liens related to the property. This documentation will be important for determining the value of the real estate assets and making decisions about ownership of real estate property. 

• Retirement account statements - Collect statements from all retirement accounts, such as 401(k)s, IRAs, pensions, or other investment accounts held by either you or your spouse. These statements provide details about account balances and can help in assessing your overall financial picture. With this information, you can ensure that accounts and retirement benefits can be divided correctly while preserving assets that will provide for your financial needs later in life.

• Insurance policies - Gather documentation related to health insurance benefits, life insurance policies, homeowner's insurance, and auto insurance. These policies may also include information about named beneficiaries, which would be important to review during the divorce process. By understanding the coverage you and your spouse currently have, you can make decisions to ensure continuation of coverage during the divorce process while also putting arrangements in place to provide the necessary coverage after your divorce has been finalized.

Create an Inventory of Assets

To ensure that your marital property can be divided fairly and equitably, it is important to take a complete inventory of your assets. Marital property includes all assets acquired during your marriage. By understanding the full extent of what you own, as well as any debts you owe and any property that is separately owned by you or your spouse, you can ensure that all relevant financial factors will be considered during the property division process. 

To create a comprehensive inventory, you need to consider various types of assets that may be part of your marital estate. Here are some common types of marital assets that may need to be considered:

• Tangible personal property: It is a good idea to compile a list of all of the physical items you own. These may include furniture, appliances, electronics, jewelry, artwork, and collectibles. It is important to assign a value to each item or category of items, and valuables such as artwork or jewelry may need to be appraised to ensure that you have a complete understanding of the value of your property.

• Real estate: The family home is often the most significant asset in a divorce. You may need to perform an appraisal to gain a better understanding of the value of the equity you own in the property and the desirability of continuing to own and live in your home. Other real estate properties like vacation homes or rental properties may also need to be evaluated as you determine how to divide your marital assets.

• Vehicles: Cars, motorcycles, boats, RVs, or any vehicles owned by either spouse should be listed along with their estimated values. You may also need to address auto loans and determine the amounts owed and the resale value of each vehicle.

• Financial accounts: Bank accounts (checking and savings), investment accounts (stocks, bonds, etc.), and any other financial assets need to be identified. By obtaining statements for these accounts that show balances as of the date of separation, you can determine whether the funds in these accounts are considered marital assets.

• Business interests: If either spouse owns a business or has an ownership interest in a partnership or corporation, it must be evaluated and assigned a value. Business valuations may require professional assistance from accountants or appraisers, and they can determine the fair market value of a business and the projected future growth and benefits that continued ownership of the company will provide for a spouse.

• Pensions and benefits plans: Employer-sponsored pensions and benefits plans can have substantial value. These include defined benefit plans such as pensions or defined contribution plans like 401(k) accounts. Benefits that were earned during your marriage or funds contributed to retirement accounts while you were married will typically be considered marital assets.

Create a Budget

Divorce often brings significant financial changes. Creating a budget will help you understand your current expenses and anticipate future costs after the divorce is finalized. As you rework your budget, you will want to:

• Evaluate your current financial situation - The first step in creating a budget is to consider where you stand financially. Take stock of your income, expenses, debts, assets, and liabilities. This will give you a clear picture of the resources available to you and the ongoing costs you will need to pay. Taking into account your current income sources and expenses will allow you to determine the monthly amount available to meet your needs during and after the divorce process.

• Make adjustments when needed - As you proceed with the divorce process, it is important to anticipate changes in household expenses. Once you have separated from your spouse, you may no longer share money in joint accounts, and you will likely need to pay certain bills independently. Take into account expenses such as rent/mortgage payments, recurring bills like utilities, costs related to groceries and other essentials, and insurance. Review any discretionary spending areas such as entertainment or travel that can be adjusted or budgeted differently moving forward. Creating a sustainable budget will allow you to avoid financial difficulties and provide for your ongoing needs.

• Consider child support and child-related expenses - If you and your spouse share children, you will not only need to make decisions about child custody, but child support obligations will need to be established. Depending on the income you and your spouse earn and how parenting time will be divided, you may either pay or receive child support. You will also need to determine how you and your spouse will share various expenses involved in raising your children, including medical expenses, school fees, daycare or childcare costs, and expenses related to extracurricular activities. By factoring these expenses and child support you pay or receive into your budget, you can make sure you will be able to address these issues correctly going forward.

• Factor in legal expenses - During your divorce, you may be required to pay different types of fees or other expenses. You will want to budget for the costs of hiring an attorney to assist you with divorce-related concerns, and you may also need to pay costs related to filing legal documents, working with child custody evaluators or other experts, or other expenses related to the legal process of divorce.

Consider Mediation or Collaborative Divorce

Depending on the issues that need to be addressed during your divorce and your ability to work together with your spouse to reach agreements, you may want to consider using alternative dispute resolution options to negotiate a settlement and avoid the time and expense associated with divorce litigation. Your options for resolving your divorce amicably may include:

• Mediation - You and your spouse may meet together with a neutral mediator to address and resolve all outstanding issues in your divorce. This may be a beneficial option if you are willing to have productive discussions and work together to reach compromises that you will both be satisfied with. Mediation can often allow couples to create divorce settlements more quickly and efficiently while giving them complete control over the decisions they make. It is also completely confidential.

• Collaborative divorce - If your divorce involves complex financial issues or other matters that may require assistance to resolve, you and your spouse can work together with your respective attorneys to negotiate a settlement. When using collaborative law, you will agree to be open and honest with each other, disclose all relevant information, and negotiate in good faith. If you cannot reach a settlement using this method, your attorneys will be required to withdraw from the case, and you and your spouse will need to find new attorneys to represent you during litigation. This encourages cooperation while helping to minimize conflict during the divorce process.

Contact Our DuPage County Divorce Lawyers

One of the most important steps you can take as you prepare for divorce is to secure representation from an attorney who can help you protect your rights and advocate for your interests throughout the legal process. At Weiss-Kunz & Oliver, LLC, our Elmhurst divorce attorneys understand the complexities and challenges involved in divorce cases. We are prepared to work with you to help you achieve your goals so that you can move forward after ending your marriage. Contact us at 312-605-4041 to set up a consultation.