If you and your partner split, it is necessary to negotiate a financial settlement. An agreement on financial terms is vital for both parties.
Most clients don't possess a clear understanding of their money prior to segregating. It can be difficult to fulfill their obligations for a truthful and full information.
Matrimonial assets
Marital assets refer to the ones you and your spouse/civil partnership are accumulating over the course of your marriage or civil partnership. These assets could be your house, savings account and autos, pensions, and cash including business and personal interests. A financial settlement can cover any outstanding debts such as mortgages, credit cards and loans. Non-matrimonial assets include those that you have acquired prior to the marriage or civil partnership, in your own name, or as gifts from someone who is not part of the marriage/civil partnership. They're not usually included in financial settlements.
When it comes to dividing the marital property, the most important priority is to look at the state's laws on property division. In Illinois, this is known by the term equitable division. This does not mean that everything is split down the middle, but rather that the division of your assets is according to the law and what you and your spouse or partner earned in the marriage/civil partnership.
The courts will examine equally the size of assets held by the spouse or partner as well as their value during marriage or a civil partnership. They will also take into account the value of any gains that are passive that is the worth of the assets which have increased because of the possession of a particular item of real estate or investment like the ownership of a stake in a business or an increase in the price of a car.
Active non-marital assets are typically only included as part of a financial settlement when you and your spouse/civil partners have reached an agreement on how to ensure the security of those assets. But, it's recommended to consult a financial settlement family lawyer before you can agree on the best way to protect or manage your assets particularly when it comes to financial settlements.
If you are the owner of any separate or premarital assets you would like to protect, you should never put those assets into a joint account with your spouse/civil partner. The process of converting separate assets into the joint account is known as transmutation. Transmutation transforms an asset into something which can be legally divided by a court.
Separate property could also end up mixed with marital assets for instance, when a spouse deposits their earnings into an account for savings jointly in a way that could alter the legal status of an asset. In such cases there is a challenge to establish that the initial property was yours alone that was not subject to sharing.
The court will divide your assets based on the current as well as future needs of each spouse. A partner who is less financially stable could get priority such as if they've been unable work and will need greater percentage of money to be able to purchase a home of their own.
After your assets are split, you are able to apply to the credit reference agencies for a notice of disassociation which removes any link between your identity and that of your spouse or former partner, after which you can then request that your name be deleted from their files. This is a crucial option to make sure that the credit of your past is free from any errors after divorce or separation.