A Structured Settlement May Help You Keep Your Home or Business in Divorce
Division of property is often a major concern for divorcing couples. As an equitable distribution state, however, Illinois law requires that each spouse receive an appropriate, but not necessarily equal, share of the marital property based on the circumstances of the marriage and divorce. There are a number of methods which may be used to divide property and the right one for a given situation generally depends on the specific assets to be distributed and their appraised value. In some cases, a structured settlement may be appropriate.
Liquidity of Assets
Establishing the value of particular assets may be fairly easy or rather complicated depending on their nature. Goods and property, such as a piece of artwork or real estate, and accounts, such as savings or certificates of deposit, can be valuated with a degree of certainty, as such assets could be converted to cash relatively easily. Others, such as the family home, a business owned by a spouse, and long-term investment or retirement accounts may require an actuary or other financial expert to calculate their actual and anticipated value. Many of these type assets are considered nonliquid or illiquid, as they are not easily converted to cash for equitable distribution.
Offsetting Illiquid Assets in a Settlement
In divorce situations with mostly liquid assets, equitable distribution can generally be accomplished by making simple value-based tradeoffs. Nonliquid assets, like a home or business, create more difficulty and their value can often exceed that of the rest of the marital property combined. For a spouse wishing to keep his or her business in its entirety or to remain in the family home, a structured settlement may provide the opportunity to do so.
A structured settlement can be used to create an arrangement in which the spouse keeping the home or business will essentially buy out the other spouse’s interest by making payments over time. Frequently, this may be in addition to the other spouse retaining all or most of the remaining marital property. The payments are generally set up at current interest rates, and, for the spouse receiving such payments, only the interest is generally taxable. The principal is not taxable due to its disposition as divided marital property.
Legal Help for Property Division
The financial circumstances of your divorce are unique to your situation, and an equitable structured settlement must take all appropriate considerations into account. For more information on how a property settlement can help you keep your home or business after divorce, contact a qualified Illinois family law attorney today. In addition to his family law background, Attorney Doug Warlick has years of experience working with businesses and complex financial situations. Call today to schedule a consultation.