Going through a divorce can be a painful and hard time in life. While it’s never easy, you’ll want to prepare yourself before going into proceedings. There are constantly changing laws and requirements to keep up with on top of everything you have going on with your spouse.
In Illinois, there are also unique divorce laws that you should be aware of. What is true in one state may not be in Illinois, so it’s best you know how the proceedings work statewide. Here’s an overview of everything you need to know about divorce laws in Illinois.
Everything You Need To Know About Divorce Laws in Illinois
For a divorce in Illinois, you can have two situations. There are divorces where spouses agree or contested divorces where spouses don’t agree. There are also certain eligibility requirements people need to meet in order to get divorced in Illinois.
You’ll need grounds for a divorce which may be fault grounds such as adultery, or no-fault.
The courts in Illinois also divide marital property as it believes is fair. This may mean the split will not be even so you should be prepared for various outcomes. Knowing what may come, how much proceedings may cost and what your options are will be key to making it through your divorce in a good mental and financial state.
Illinois Legal Aid provides a great guide to new divorce laws in Illinois as well.
Eligibility and Illinois Divorce Requirements
To be eligible for a divorce in Illinois, you must first be a resident for at least 90 days.
The plaintiff may file for divorce at the circuit court where they reside or where their spouse resides. In Illinois, a spouse generally needs fault-based grounds for divorce. This means the spouse filing for divorce would need a specific reason for ending the marriage.
Illinois is a “no-fault” state where one spouse can file for divorce if a couple has lived apart and attempts to reconcile have failed. You need to show that you have lived apart for a period of not less than six months.
When a spouse has valid grounds for divorce, they are able to file in circuit court. The spouse filing may deliver the official Petition for Dissolution of Marriage. The other spouse has 30 days to respond to the petition.
How Assets Split in State of Illinois Divorce Law
In Illinois, financial assets such as brokerage accounts, and other investments all fall under the same scope of the property. The judge may go forward in splitting up property and the court will decide what property belongs to which spouse and what property is marital property, belonging to both spouses.
In general, divorce laws in Illinois define marital property as the property that you acquire or earn during the course of your marriage. The property you and your spouse earned or acquired before marriage is separate property. Gifts or inheritance are also included in this.
Separate property can turn into a marital property in many cases. Let’s say you inherit money from a grandparent and you deposit that money into a joint bank account with your spouse. The money then becomes marital property. Once the court distinguishes what property is separate and what is marital, the breaking up process begins.
A judge will divide up property based on the length of your marriage, the financial resources of both spouses, as well as the contribution each has made to the value of the marital property. It’s important to note that in Illinois, even if one spouse has committed misconduct such as adultery, it doesn’t mean the other will get more of the marital property.
Property Division and Divorce Rules in Illinois
Much like with financial assets, Illinois judges can divide physical property as they deem fair. Judges consider many factors here.
The economic resources of each spouse, their age and health, their employability, as well as their projected economic conditions are all considerations a judge takes in when dividing up physical assets. The economic state of each spouse weighs heavier here. The court can decide to award bank accounts, mutual funds and other marital assets to the lower-earning spouse.
If you need to sell your home during the divorce proceedings, you can turn to a professional who specializes in distressed home sales or selling homes quickly.
Managing Child Support in Illinois
Anyone under the age of 18 is a child in Illinois. If someone is 19 and still attending high school, they are also considered a child. Under the divorce laws in Illinois, the custodial parent can receive child support from the other spouse.
In Illinois, a Flat Percentage of Income Model is used to determine the child support payment amount. This formula usually disregards the custodial parent’s income and takes the other parent’s net income minus some deductions. Common deductions include Illinois and Federal taxes, social security and FICA payments, retirement contributions, and health premiums for themselves and the children.
The statute for the percentages taken out of their net income is 20% for one child, 28% for two children, 32% for three children, 40% for four children, 45% for five children and 50% for six or more children. Unless it’s deemed inappropriate for the best interest of the children, the court will enforce these rules.
Alimony Payments in an Illinois Divorce
Under the divorce laws in Illinois, either spouse is able to receive alimony payments. Alimony payments are spousal support or maintenance payments. The court will determine the amount and duration of the payments based on a number of different factors. Marital misconduct and fault are not deciding factors in Illinois.
The financial resources granted to either party following the divorce proceedings including property are taken into consideration here. The financial needs of both spouses, as well as their earning capacity, are also factored in. The court will also decide how much time it may take for either spouse to become self-sufficient.
Physical and emotional factors are also considered when determining alimony payments. The court will factor in the mental and physical condition of each spouse, the tax implications on each spouse after the division of marital property, and any additional factors the court decides are necessary.
A spouse can also request temporary alimony. This can be received by one spouse while the divorce is pending. Once the judge issues the final judgments and the divorce is final, the temporary alimony payments will cease. This can help a spouse who wasn’t working maintain their financial obligations while the divorce proceedings are happening.
Even with alimony payments, the court will expect the other spouse to make all reasonable efforts to become self-sufficient. If that spouse has a medical reason or a permanent inability to become self-sustaining, the court may decide differently.
How 401(K) and IRA Plans are Divided
A judge will treat retirement plan assets such as 401(k) accounts and IRA plans as any other type of property. Under Illinois divorce laws these are property. There are some important notes pertaining to retirement plans you should know.
With retirement assets, the judge will first determine which portion is considered marital property. The court will define a dollar amount which was accumulated during the marriage and divorce. This will be considered marital property. Anything that was accumulated before marriage is private property, however.
The court will decide moving forward as to how the assets should be divided based on a number of factors. To start, a Qualified Domestic Relation Order or QDRO would be issued to the plan administrator. This document would detail how the account should be divided and by what means.
You’ll usually fare better if the account is based on percentages over dollar amounts. If the market swings downward or upward, this will protect either spouse. Plan administrators may have their own means and rules for this process as well. These rules would dictate how money is moved around within plans to comply with federal regulations. The Qualified Domestic Relation Order is typically issued after the divorce is finalized.
Keep in mind that any money that is withdrawn or moved from retirement plans before the age of 59.5 is subject to serious tax penalties.
Receiving Shares of 401(K) and IRA Plans
Recipients of retirement funds have a few options for receiving their shares of a 401(k). The Qualified Domestic Relation Order may dictate immediate and direct distribution. In this case, neither person would owe the early withdrawal penalty of 10% if any would have applied.
Recipients will have to pay the regular income tax on the amount they will receive. This might not apply with a Roth 401(k) however. The tax can be avoided if either spouse sets up 401(k) rollovers into their own accounts.
IRA accounts are set up a little differently. A Qualified Domestic Relation Order doesn’t apply when IRA assets are divided up.
The couple should wait until the judge has finalized the divorce however to avoid the taxes and penalties. Once finalized, a divorce decree will be sent to the IRA plan administrator which will indicate how the assets in the plan should be split.
Both parties will benefit from transferring any shares from their IRA directly into their own personal IRA. This process is known as a trustee-to-trustee transfer. With a trustee-to-trustee transfer, both spouses would be cleared from any potential taxes, fees, and penalties.
You can see that the splitting of retirement assets can be quite complicated. Once you factor in penalties and taxes, as well as the true value of the retirement savings, you’ll need advisement on how best to navigate this. It’s important to seek the counsel of a financial advisor and divorce lawyer here.
Professionals such as attorneys and financial advisors can help guide you through the process and help mitigate your losses on fees and taxes whenever possible. These professionals specialize in making the process run smoothly and knowing how best to protect as much of your money as possible.
Estate Planning Through a Divorce
When it comes to testate planning under Illinois divorce law, a surviving spouse loses all rights to property that has been designated in the will of a deceased spouse. When divorce proceedings are underway however, this isn’t the case.
Let’s say during a divorce proceeding, one spouse passes away. The other spouse can still lay a claim on anything in the will of the deceased spouse. It’s important to always keep your will updated for this and many other reasons.
In cases where there are children, the children and their guardians will manage inheritance and the splitting up of assets. If there are no children, an ex-spouse may receive an entire estate.
Updating your will or establishing a revocable living trust can help you decide where your assets will go when you pass away. You’ll want to do this while you’re separating and especially when divorce proceedings are underway.
How to Protect Yourself and Your Finances During a Divorce
Divorce laws in Illinois can be tough to navigate. The bottom line is to stay informed on the details, work with professionals you trust and be as clear as possible during the entire process.
During a divorce, emotions can run high and your finances may be in jeopardy. Protect your assets with a qualified Illinois divorce lawyer and financial planner.
If you need to sell a property quickly during your divorce proceedings, click here to learn more and get the process started.