If you are getting a divorce in Illinois, there are several common financial pitfalls you should avoid. You should also think about the cost of the process itself, which you may be able to keep down if you do not have to go to court for property division or other issues. It is not always possible to avoid having aspects decided by a judge, but you should keep the points below in mind whether you are in negotiation or litigation.
It is important to be accurate in valuing your properties, especially if instead of dividing an asset equally, you are each taking an asset of equal value. While it might appear that two assets have the same value, if there are costs associated with maintaining one and not the other or one will be taxed on withdrawal or liquidation and the other will not be, they are not equal.
In particular, you should keep this in mind when it comes to your home. There are a number of complicated factors to consider here, including capital gains if you sell it and the need to refinance it if you keep it. You should also make sure you can manage the upkeep on a single income.
It is important to divide retirement accounts correctly to avoid penalties and taxes. For example, for a 401(k) and pensions, you will need a document called a qualified domestic relations order. You may also need to roll your distribution into an IRA.
Since Illinois is not a community property state, property is supposed to be divided equitably but not necessarily equally in a divorce. If you are negotiating your divorce agreement instead of having a judge make a decision, you need to strike a balance between agreeing to compromises and protecting yourself financially.