For many Illinoisans, divorce is the toughest business transaction of their life. It involves a whirlwind of emotion and potentially complicated property division. This division can include not only a house, but also retirement accounts, investments, a shared business and more. Because of the complexity involved, Illinoisans should not wait until they are in the maelstrom of a divorce to start learning about finances.
Unfortunately, that is exactly what happens in all too many cases. Take, for example, the following scenario: the couple specializes. As part of the specialization, one spouse takes care of the finances. This specialization works great while the marriage rolls forward. But then the marriage hits a bump in the road and the couple chooses to get a divorce.
If that happens, the spouse who did not specialize in the finances has no clue where the couples' money is. While that spouse gets up to speed on the couples' finances, the other spouse is already knowledgeable and has time to hide assets and set things up to his or her advantage. If the knowledgeable spouse has had a long head start, the other spouse can be in real trouble.
To nip this problem in the bud, spouses who do not know much about the family finances should take a more active role. That means getting educated and talking over the finances with their significant other. Both spouses should know where the couples' money is and why.
If it is too late for that, Illinoisans can partner with a professional, such as a forensic accountant and a divorce attorney, to help them disentangle the mess.
Source: Forbes, "Financial Literacy: The Key To Every Woman's Financial Stability," Jeff Landers, March 6, 2014