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If you follow the tabloids and Hollywood divorces, you might
mistakenly believe that property is automatically divided 50/50 in
a divorce. While that it is true in community property states like
California, it is not true in Illinois. Illinois is an equitable
distribution state, which means marital property is divided in
"just proportions," not necessarily 50/50. In deciding
what is just proportions, the court considers a myriad of factors,
including, but not limited to, each spouse's contribution to
the marital estate, homemaking contributions, waste of property,
length of marriage, debt obligations, age and health, custodial
provisions for children, and tax consequences. In short, there is
not much that the divorce court is not required to consider in
dividing property in just proportions. Significantly, the division
of property does not turn simply on which party made the most
financial contributions to the marriage. Non-financial
contributions, such as homemaking and child rearing activities, may
be equally important especially in long-term marriages.
In my experience, in the division of the marital estate most
judges start with an internal mind set of "why shouldn't
this be a 50/50 division?" and then let the lawyers argue why
their client should get a disproportionate division. In Illinois,
there have been reported cases where an equitable division of
property has resulted in a 90/10 division in favor of one spouse,
or even 100% and zero. It is a fact specific determination, but the
vast majority of the cases are within the 50/50 to 60/40 range.
In negotiating the division of property, it is as important to
ensure that assets and liabilities are fairly valued, as it is to
negotiate a fair percentage of the marital pot. The reason for this
may not be readily apparent. A 50/50 division on paper where one
party receives assets that are overvalued is not really a 50/50
division.
The valuation of assets such as bank accounts, brokerage
accounts, cash value of life insurance is relatively straight
forward. However, when real estate, closely held businesses, or
partnership interests are at issue, appraisals and valuation
reports often must be obtained from experts. Based on these reports
and opinions, the parties either negotiate fair market value or
leave it to the court to decide the value of the asset and
appropriate division.
The value of property is required to be measured at or as close
to the end of the case as possible. Particularly in today's
economic climate, the valuation of assets and liability is a moving
target. It is not unusual for updated valuations to be obtained
while the case is pending. It is also not unusual for a spouse to
obtain new property during the divorce case. That property must
also be valued and could have the effect of delaying the case.
An attorney knowledgeable in property valuation and division
cases is of a great value to the client. Clients faced with large
or complicated property division cases should investigate the
experience of the attorney before the attorney is retained,
remembering that an accurate valuation of assets is often as
important as the percentage division.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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