What Are the Most Common Assets in a Marital Estate?

 Posted on December 15,2023 in Family Law

When a couple decides to divorce, one of the most significant areas that need to be determined is how the marital estate will be divided between them. Illinois follows the equitable distribution principle. This means that while the estate will be divided fairly, it will not necessarily be divided 50/50.

The marital estate is made up of all the assets and debts a couple acquires during a marriage. While the makeup of assets may vary widely from one couple to another, there are four common types of assets that many marital estates contain. If you are considering divorce, it is important to make sure you speak with an Illinois divorce lawyer to ensure your financial rights are protected.

Real Estate

Real property, including the family home, investment, and vacation properties, make up marital real estate. There are various options that a couple has when negotiating how these properties should be addressed:

• Buyout – One spouse may choose to buy out the other's share of the property and retain ownership.

• Sale and equitable distribution – In some divorces, the most practical solution is to sell the property and divide the proceeds equitably between the spouses.

• Co-ownership – In certain situations, couples decide to continue co-owning a property.

Retirement Accounts and Pension Plans

Retirement assets, such as 401(k)s, IRAs, and pension plans, are all considered marital assets. These assets require careful consideration and division to ensure each spouse's financial security in the future. When the assets in these accounts are divided between the spouses, the court will issue a Qualified Domestic Relations Order (QDRO). This order enables the separation of retirement assets without either spouse incurring early withdrawal penalties or taxes and specifies how the benefits will be distributed between the spouses upon retirement.

Financial Investments

Investments in stocks, bonds, mutual funds, and other financial instruments can also make up a substantial part of a marital estate, particularly if the couple has been married for a long time. Dividing these assets can be complex, especially if their value has grown significantly during the marriage. Common approaches to dividing financial investments include:

• Splitting assets in-kind – Dividing the investments between spouses, but maintaining their existing portfolio structure

• Selling and dividing proceeds – Liquidating the investments and splitting the cash proceeds between the spouses

• Trading assets – Swapping different investments to achieve an equitable distribution

Businesses and Professional Practices

When one or both spouses own a business or professional practice, the valuation and division of these assets can be particularly challenging. Determining the fair market value of a business often requires the involvement of financial experts or forensic accountants. The options for handling business assets in divorce include:

• Co-ownership or buyout – One spouse may buy out the other's interest in the business

• Selling the business – Spouses can liquidate the business and dividing the proceeds

• Continued co-ownership – In some cases, divorcing spouses choose to continue co-owning and operating the business

Contact a DuPage County Divorce Lawyer for Legal Assistance

If you have decided to end your marriage and you and your spouse have substantial marital assets, it is important to have a skilled Lombard, IL divorce attorney advocating for you and making sure you receive your fair share of the marital estate. Call Mevorah & Giglio Law Offices at 630-932-9100 to schedule a free and confidential consultation.