Recent Blog Posts
Valuating the Family Business During a Divorce
Divorce is complex; however, dividing property is often most complex aspect of a process that can take a long time. Nowhere is this better illustrated than in the procedure for valuing and dividing a family-owned business. Between personal preferences and the market rates, dividing the value of a business will often create the biggest issues during the process.
Valuation Basics
As one might imagine, Illinois courts only have the ability to divide marital property during divorce proceedings. A family business qualifies as marital property if it is run by both spouses or if one spouse owns a controlling interest. The rationale is that the spouse working there will bring home paychecks earned by improving the business’s value. If the business is deemed marital property, it will be valued so that it and the couple’s other assets can be divided equitably.
Valuations are most often conducted by independent experts so as to avoid any accusations of favoritism or impropriety on the part of one spouse. Such experts will take into account a host of different variables, including:
False Accusations of Abuse in Parental Responsibility Proceedings
During some divorce or parental responsibility proceedings, one or both spouses will resort to unethical tactics in order to get ahead. Accusing the other spouse of child abuse is a tactic that has become unfortunately more common in recent years, but it still does not happen as often as one might think. Still, if it happens to you, it is important to know how to defend yourself from false allegations of abuse.
“Reasonable Belief”
As one might imagine, child abuse allegations are taken extremely seriously. The number of children actually removed from their homes, however, has decreased in recent years. When abuse allegations are made, the Illinois Department of Children & Family Services (DCFS) is called in to do an investigation. This is not a criminal investigation, but it can easily become one. The important thing is to cooperate with the investigation—any resistance can be taken as a possible indication of guilt.
Mishandling Assets During Property Division
When a couple decides to divorce, the standard procedure is to compile a list of all marital assets and distribute them equitably between the spouses. However, sometimes things do not go according to plan. A spouse may hide assets, sell them, or even engage in dissipation. You must be aware of what constitutes improper conduct so that your divorce proceeds as smoothly as possible.
Hiding Assets
In most states, Illinois included, a temporary restraining order may be placed on both parties at the beginning of a divorce proceeding. This order prevents disposing of any marital assets in any way and is generally recommended if either spouse suspects the other will engage in unethical behavior. The rationale is that marital property is the property of both people in the marriage, and one spouse disposing of assets breaches the covenant both people entered into when they got married. Most of the time, these orders only apply to marital property; items not classified as such (in other words, as personal property) may generally be sold freely.
What Does a Guardian ad Litem Do?
Sometimes, though we hate to admit it, we are not our children’s best advocates. In an environment such as family court, especially, the state tends to be of the opinion that we cannot impartially advocate for our children’s best interests. To protect their interests and their safety, professionals referred to as guardians ad litem are often appointed to act for children in legal proceedings.
Role of a GAL
A guardian ad litem (GAL) is an attorney who may be appointed by a family court judge to ensure that the interests of children are protected. Each county has its own procedure for appointing a GAL and will make such appointments with varying frequency. In Cook County, for example, in Cook County, there is a tendency to use GALs slightly less, as the Office of the Cook County Public Guardian is sometimes used to represent minors in specific cases.
Divorce and Annulments: When to Use Each
Sometimes, marriages do not work out. However, the same dissolution procedure is not always the best for each situation. If you have been married a very short time, you may be able to annul your marriage instead of having it dissolved. Still, it is important to understand when this is appropriate and when you are better off opting for a standard divorce.
Dissolution of Marriage
A divorce is referred to under Illinois law as a dissolution of marriage, and almost any couple can obtain one. Until recently, Illinois offered fault-based grounds for divorce such as bigamy, but the law was amended in 2015 to remove all grounds except for irreconcilable differences—the standard “no-fault” ground for divorce. The law was also changed to eliminate the requirement for a couple to live apart for six months or more before their divorce could be granted.
Jurisdiction Questions in Divorce
When people decide to get divorced, even the most elementary issues must be in proper order, or there could be problems with the legality of the proceedings at a later date. Jurisdiction is usually one of these issues. Most of the time, the parties assume all is well with this aspect, and they are usually correct. However, if a spouse has moved out of state or is in the military, there could be jurisdiction questions that must be answered.
Types of Jurisdiction and Requirements
If you or your spouse decide to move out of Illinois, it is generally not a problem unless it can be proven that you moved deliberately to cause issues or confusion for your spouse, such as frustrating parenting time considerations. Any state where one spouse has been resident for at least 90 days has jurisdiction to oversee a divorce filing under Illinois law. However, it can be markedly more complex: namely, because not every situation in which a state has jurisdiction over a divorce is one where that state also has jurisdiction over issues like property division. This is referred to as the principle of divisible divorce.
How to Divorce a Spouse You Cannot Find
There are occasions in which a divorce must proceed happen in a way very different from the norm. One of the most common is for a spouse to be missing or deliberately absent, so as to frustrate personal jurisdiction over them. This does not mean that you are stuck in a marriage you wish to dissolve; it just means that divorce must be sought in a different way.
The First Steps: Due Diligence
In a divorce, you must be able to serve your spouse with papers, as he or she has the right to appear on his or her own behalf or contest the action. However, if you cannot locate your spouse, an alternate method has to be found, and you must obtain permission to use it. The first step toward obtaining that permission is to put forth a “good faith effort” toward locating your spouse. You must be able to show the judge that you have exhausted all reasonable options to find your spouse before you will be permitted to pursue alternate service. For example, many judges require you to look in places like indexes from the Department of Motor Vehicles (DMV), Social Security’s database of deaths, or even on social media to try to find a trace of your soon-to-be ex.
College Expenses and Continued Child Support
Most divorced parents think of child support ending when the child in question turns 18 years old. Usually, this is the case. However, there are several situations in which a court may order more, and one of those is when dealing with college expenses. Illinois law differs somewhat from many other states’ in that while married parents may decline to contribute to their children’s college expenses, unmarried parents may be ordered as part of a divorce agreement to contribute according to their income level.
Non-Minor Support
College expenses such as tuition, room and board, books and the like fall under a legal category Illinois calls non-minor support. It is also possible, but somewhat less common, that the court will hold some living expenses to fall into that category as well—costs such as bus or train passes and medical insurance. The key word in such determinations is “reasonable,” and the court has quite a bit of leeway in that regard.
Divorce and Filing for Bankruptcy
Sometimes, life attacks from multiple sides. Sadly, it is not uncommon for those going through a divorce to end up in bankruptcy at the same time, with seismic changes to one’s finances as a result of debt restructuring. However, depending on your unique situation, it can be difficult to determine which proceeding should happen first and how to handle both.
Divorce First
Depending on the situation, getting a divorce before filing for bankruptcy can be the best path for many couples. There are two different types of bankruptcy filings, each named for the chapter of the U.S. Bankruptcy Code used for the filing. Chapter 7 is for individuals or couples with very few assets, while Chapter 13, also called a reorganization bankruptcy, is for those with steady income and debt that it is possible to restructure.
It is possible for couples to file together, but it is also common for each person to file individually. If you are divorced before your bankruptcy proceedings, a Chapter 7 filing will be much more streamlined than it might be otherwise. Conversely, if the divorce happens after the bankruptcy, marital assets might be sold to pay off debts during the filing, which can make a later divorce extremely difficult in terms of equitable distribution of the remaining assets. Whether you file together as a couple or as individuals can also make a difference. Some debts are not dischargeable, and with many marital debts, it is possible for creditors to attempt to hold the husband responsible for debts that the wife originated and vice versa.
Dividing Intangible Assets During Divorce
As you probably realize, all marital assets must be divided between the spouses during a divorce, unless the asset has been addressed beforehand, such as in a prenuptial agreement or other contract. This includes intangible assets, such as patents, royalties, and business goodwill. It is very easy to become confused when dealing with intangible assets, and consulting an attorney may help clear up some of your questions.
Important Definitions
An intangible asset is simply an asset with no physical form. One may be able to see the effects of the asset’s possession, such as elevated goodwill, brand awareness, increased income, and the like, but the asset itself has no physical or transportable form. Most of the time, these assets are treated in a similar way to any tangible piece of marital property, but there are exceptions.
It is important to note that intangible assets are not quite the same as indefinite assets, though the two terms are often used interchangeably. An indefinite asset is something which can be seen to affect its holder—for example, the brand recognition of the Coca-Cola Company—that stays with the company or person indefinitely, while a definite asset is intangible, but has a finite shelf life. The most common example of such assets are those which are operated under license and revert to the original holder at the expiration of the license. Definite assets tend to stay in the possession of the holder while indefinite assets are more likely to be held to be marital property.
