Chicago-Area Attorneys Help Preserve Real Estate, Business & Investment Assets in Divorce
Chicago Divorce Attorneys
Property division must be equitable, but compromises can be reached to reduce taxes on the assets you amassed together
Trying to reconcile feelings of resentment with the impulse to be fair can be difficult when you are considering the division of your marital assets during divorce. The Law Offices of Michael P. Doman, Ltd. is here to give you perspective and ensure you do not let your emotions undermine your rights to martial real estate, business and investment assets.
On your side will be 25 years of asset distribution experience — plus a background in accounting and master of laws in taxation
We are skilled when it comes to the distribution of property. Much of this is due to our 25 years’ experience in how to best propose, concede and otherwise negotiate a financial split that will satisfy the court’s ultimate goal of a “fair and equitable” arrangement. We also know the strategies your counterparty and attorney may employ:
- Hiding assets
- Quitting a job
- Filing for bankruptcy
Our divorce practice features both experience in the courtroom and an emphasis on business, accounting and tax law. Our founder, Michael P. Doman, holds an LL.M. in taxation and once worked for an accounting firm. When the spouses own financial holdings of substantial size, we are at adept at arranging and vetting business, real estate and financial asset valuations and appraisals for art, jewelry and collectibles. We are also up to speed on all applicable tax codes.
Protecting a business in divorce
These are the biggest risks a business will face if ownership is left to a divorce court to decide:
- The business may be handicapped if one spouse is not equipped to handle a share of the business effectively, possibly alienating other business partners.
- Your spouse may immediately seek to sell a court-awarded share of the business, incurring a tax liability and exposing the enterprise to ownership by an unknown outside party.
Businesses can be shielded in a divorce. Small- to medium-size entities such as partnerships, limited liability companies and S corporations should establish rules that dictate what happens when a partner must sell shares, not just to fund a divorce but for any reason, really. In the case of a sole proprietorship or informal family business, a prenuptial or postnuptial agreement may spell out what will happen to the enterprise in the event of divorce.
If a portion of the business must go to your spouse, the court will ask for a valuation of the business. The Law Offices of Michael P. Doman reviews valuations and recommends tax-sensitive strategies for the business’s division. Compromise may be in order — rather than split ownership, one spouse might instead take the other’s retirement plan assets in lieu of receiving a share.
Retirement assets owned prior to the marriage may remain with the partner who owned them, but the court is likely to split any gains on those assets, as well as any assets invested during the marriage. When the asset is a stock or a bond — such as with a 401(k), IRA or Roth IRA — it’s best to split it by percentages rather than dollars. Our attorneys draft a Qualified Domestic Relations Order (QDRO) that divides your retirement plan fairly and helps you avoid early withdrawal tax penalties.
Division of real estate assets
Equity in the marital home often constitutes one of the biggest assets to be divided. The equity is the market value of the real property on the date of the divorce trial (not the time of physical separation or when the petition was filed), less any debts (mortgage, taxes and home equity loans) or liens against it.
These are the options for handling the marital home:
- The spouses may sell the home and divide the equity.
- One spouse may refinance the home and buy out the other’s share.
- One spouse (usually the custodial parent) may remain in the home with the exclusive use and possession for a certain period of time, for example, until the youngest child graduates from high school, at which point either #1 or #2 above is put into effect.
In the case of a vacation home or other real property, alternatives #1 and #2 apply.
Don’t let taxes take your assets in divorce
You and your divorcing partner will lose some tax benefits in becoming single again — don’t let the requisite division of assets set you both up for further tax dilution. Call The Law Offices of Michael P. Doman, Ltd. at 847.897.5288 or contact us online to see how we can foster a fair and equitable distribution of assets.