There is no doubt that student loan debt is on the rise in the United States, and something that is burdening the nation. According to America’s Debt Help Organization, the total of U.S. student debt loans is up to a shocking $1.4 trillion. The investment in college is a big decision, and this high price tag often comes with great rewards. Obtaining higher education is important to many, and can offer new career opportunities that can propel the future of families in a positive direction. However, this debt is increasingly becoming an issue of concern for couples who are considering getting a divorce. It is important to consider how the division of assets and debt during your Illinois divorce proceedings can impact you. 

Who Is Responsible for Student Loan Debt in a Divorce?

Typically, the debt that was acquired from student loans before the marriage is of the responsibility of the spouse who attended higher-ed schooling. However, if the student loan debt was obtained during the marriage, then it is likely that will be considered marital debt. Many factors are still taken into consideration, such as when the debt occurred in the marriage, who was the main benefactor, and the earning power of each partner. For example, if a partner acquired a medical degree to bring in a higher income for the family, it may be deemed marital debt since the increased income benefited the marriage as a whole entity. 

When a couple decides to legally end their marriage, there are many issues that need to be addressed. For example, if children are involved, who will be allocated parental responsibilities, child support payment amounts, and a parenting time schedule must all be resolved. Decisions regarding who will get what in the divorce settlement are also important. Marital property can include homes, furniture, vehicles, as well as monetary assets like savings or retirement accounts. Spouses who did not work or participate in any type of retirement savings plan may wonder if they are entitled to a portion of their partner’s account. In Illinois, marital property is divided according to the principles of equitable distribution. As a result, your future ex-spouse can receive part of your retirement savings even if he or she never contributed to the account.

Types of Retirement Plans 

There are many different types of ways to save for retirement. In today’s society, people do not always spend their entire career with one company like in years past. Employees often choose to roll over their retirement accounts as they change jobs. In some cases, a business might not even offer any type of savings plan for retirement, so workers might create their own through a bank or a financial planner. 

A few of the most common retirement savings plans include:

A divorce can trigger many different emotions, from anger to sadness to resentment. Although there are couples who part ways amicably, many divorces can be contentious. Such cases can involve disputes over parenting time, child support, spousal maintenance, and property division. One of the biggest questions is who will be allowed to stay in the marital home? In many cases, both spouses feel like they are entitled to the house they bought together. However, usually only one spouse will remain in the home and the other spouse will move out. Determining this can be complicated and a major point of contention. 

How Are Marital Assets Divided? 

In Illinois, marital assets or property include anything that was acquired during the marriage. This can also be debts that one or both partners accrued. Non-marital property are things that each spouse owned before the wedding or acquired once they legally separated. Gifts and inheritances received by just one spouse during the marriage are still generally considered non-marital property. On the other hand, the home the couple lived in is often considered marital property, even if it was bought before the couple was married.

When it comes to splitting the marital estate, it is divided according to “equitable distribution.” This means items are divided fairly and may not be split exactly in half. The courts will consider several factors when deciding how to divide the assets equitably. Some of these factors include:

When a couple decides to end their marriage through divorce, they have the option of deciding how to divide their assets and wealth on their own. However, when a couple cannot come to an agreement about property division, the courts must intervene. Illinois courts use a system called “equitable distribution” to divide a divorcing couple’s marital estate. If you are considering getting a divorce in Illinois, it is important to understand how asset division decisions are made.

Marital Property and Separate Property

According to Illinois law, only marital, or shared, property is divided in a divorce. Marital property typically includes any property or funds that either spouse accumulated during the marriage. Non-marital property, or separate property, includes assets that a spouse already owned before he or she got married. However, differentiating between separate and marital property is not always this straightforward. Certain gifts and inheritances may also be considered separate property – even if the spouse received the gift or inheritance while he or she was married. Furthermore, separate property can be transformed into marital property when it is commingled with marital property.

For example, if a husband purchases a house before he got married but then he and his wife both contributed to the mortgage, the home will likely be considered marital property during divorce. Similarly, if one spouse receives an inheritance during the marriage but then deposits those funds into a shared account, the inheritance funds transform from separate into marital property. The inheritance would then be subject to division according to equitable distribution.

If a couple has been married for many years, the decision to divorce is not an easy one. Since a lot of time and effort was put into the marriage, it can be devastating both emotionally and financially for one or both of the spouses. The division of marital assets is an issue that needs to be determined during the divorce proceedings, which can cause a lot of conflict if the spouses do not agree on how to divide everything, especially financial assets. One or both partners might have retirement accounts such as 401K, IRA, or pension. Even in an uncontested divorce, splitting the retirement assets can be confusing, so it is helpful to seek legal counsel to make sure both spouses receive what they deserve.  

What is Considered Marital Property?

According to Illinois divorce law, any marital property will be divided fairly and equitably, but not necessarily equally. This is referred to as “equitable distribution.” Marital property is generally considered all property acquired by either spouse during the marriage. This can include real estate, furniture, and vehicles, in addition to financial and retirement accounts.

A spouse may be entitled to a portion of the other spouse’s retirement plans, such as a 401(k), IRA, stock options, or pension benefits, and vice versa. If a spouse pays into a retirement account or a pension during the marriage, at least part of that account or pension is considered marital property, regardless if only one spouse’s income was paid into the account. All pension benefits, including those under the Illinois Pension Code, as well as stock options, acquired by either spouse during the marriage are marital property, regardless of which spouse participates in the pension plan.

When a couple decides to divorce, many issues need to be addressed, especially if they have been married for a long time. One such issue is how to divide marital property and assets. One of the most common questions in a divorce is “Who gets the house?” Illinois is an “equitable distribution” state, not a community property state. This means marital property, including debt, does not need to be divided “equally.” Instead, the law requires property to be divided "equitably." Your house (or houses if you own more than one) is probably the largest asset you and your spouse own, so it is imperative to divide it in a way that is fair to both spouses in a divorce. 

Ways to Split Real Estate in a Divorce

Couples who are divorcing should keep in mind the sale of a home will likely have tax implications and therefore should be factored into the decision-making process. They should also consider what is in the best interest of the children if they have kids.

Options exist for division of real estate such as a house. Here are some clever tips for splitting a home or homes when going through a divorce: