If you or your spouse are separating you will need financial settlement come to a settlement with your financial partner. Without one, there might severe consequences for both parties.
A lot of people don't have an accurate view of their financials prior to splitting. This can make it difficult for clients to comply with their legal obligation of an honest and complete declaration.
Matrimonial assets
Marital assets are those you and your spouse/civil partnership have accumulated during the time of your marriage or civil partnership. These assets could be your house, savings and cash, pensions and vehicles as well as business interest. Financial settlements can also include any debts, like a mortgage loans and credit card commitments. Non-matrimonial assets include those that you acquired before the marriage/civil partnership in your personal name or obtained as a gift from someone outside of the marriage or civil partnership. These are not normally considered in a financial settlement.
In the process of dividing your marital assets, the primary priority is to look at the state's laws concerning division of property. In Illinois it is referred to as equitable distribution. It does not mean every asset is split in half however, assets are distributed according to laws and according to what your spouse/civil partners deserved when they were married or civil partnerships.
The courts will examine both the value of the assets owned by each partner and their development during the marriage or civil partnership. The courts take into consideration any passive value improvement, which refers to the increment of the value of an asset as a result of investment or ownership in a business or property or an increase in the price for a vehicle.
Assets that are not marital and active can usually be included in a settlement of financials if the spouse or civil partner and you have reached an agreement about how you will ensure the security of the assets. But it's best to consult with a family lawyer before you can agree on the best way to protect or use your assets, especially when it comes to financial settlements.
If you have any separate or premarital assets that you wish to guard, avoid putting them in the joint accounts of your spouse or civil partner. Transmuting separate assets to a joint one is called transmutation. Transmutation transforms an asset from something that can be legally divided through a court.
Separate property could also end up commingled with marital assets, such as when one spouse puts their earnings in joint savings accounts, which again can change the value of that asset. In these cases there is a challenge to prove that the primary item was yours only that was not subject to sharing.
When your marital assets are divided, the court will consider each spouse's demands for both the immediate and future to decide how much each should receive. If the economically less strong partner cannot make an income and requires a greater share of financial assets to buy an apartment, they could receive priority.
If your assets are split and you have separated them, you must apply for an official disassociation letter from credit bureaus. The disassociation notice will erase any relationships between your name/names as well as those of your ex-spouse or partner. After this has been completed, you may request the removal of your name. It's a great idea to do this to ensure that you ensure your credit is clean following divorce or separation.