In divorce proceedings there are instances where one spouse is nearly oblivious to the current state of their mutual financial affairs. This is common in families that have a traditional structure – where one spouse, commonly the wife, is the homemaker and the other spouse, commonly the husband, is the bread winner of the family and controls the finances. Often the non-wage-earning spouse will come meet with me to discuss filing for divorce, but not have access to any information regarding their finances, such as household income, the mortgage amount, monthly expenses, investments, business interests, and real property values. There is no reason to panic or feel bad for lacking information. 

For clients in this situation, I ask questions and acquire information that might help develop, at a minimum, a baseline idea of the household finances. If the client is unable to produce even a limited amount of information, it is far from an unresolvable issue. In fact, rest assured that we have the ability during the discovery phase of a case to obtain all necessary information required to understand the marital finances.  These tools include, but are not limited to: 1) requesting a financial affidavit from the opposing party; 2) requesting documents related to income, liabilities, banking, investment, retirement, real estate, insurance, taxes, and health care; 3) issuing interrogatories (multi-part questions that round out the financial picture); 4) taking depositions; 5) issuing subpoenas for records to financial institutions, employers, business associates, etc.; and 6) hiring experts to perform myriad services like business valuations and real estate appraisals. 

There are two basic understandings related to finances that are crucial to every case- property and cash flows.  Property is essential to understand because we have to create a balance sheet containing all marital and non-marital assets and liabilities so that we know what is subject to division and how to allocate them between the spouses.  Illinois is an equitable distribution state, meaning we start out with the premise that the estate should be divided equally and then look for reasons why we might deviate from center. Reasons for deviating from center include, but are not limited to, one party having a significant non-marital estate and a party having exponentially greater earning capacity into the future than the other.  If one or both of these reasons to deviate exist, the inferiorly situated spouse, typically the homemaker, will likely receive a disproportionate share of the marital estate.

The parties’ cash flows are equally important to every case as they provide direction on how to calculate support obligations such as maintenance (the term for alimony in Illinois) and child support. These calculations are determined based on the parties’ respective incomes which get plugged into guideline formulas when the combined incomes are less than or equal to $500,000.  When the income(s) exceeds that amount, the determination becomes more subjective and relies considerably more on the needs/lifestyle of the recipient spouse and/or the needs/lifestyle of the child(ren).  

I view it as my job to educate my clients during and after the divorce proceeding. I do this by gathering information to paint a picture of the financial health of the marital estate and how that will translate to the post-divorce life once the assets and cash flows are equitably divided. After the divorce is finalized, I believe it is incumbent upon me to then advise my homemaker spouse on the appropriate professionals (financial advisors, accountants, insurance advisors) to work with to further their understanding of the new financial condition and afford my client the ability to make educated decisions relative to maintaining a lifestyle in conformance therewith moving forward.

Thomas T. Field, Divorce and Family Law Partner – Head of Family Law Group