Articles Posted in Divorce

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In just a few short years, cryptocurrency has moved from the fringes of the technology and finance worlds into the mainstream.  According to a Pew Research Poll conducted in November 2021:

  • 86% of Americans had heard “at least a little” about cryptocurrencies,
  • 24% claimed to know “a lot” about them, and
  • 16% had personally invested or traded in them

Among those who had invested or traded cryptocurrencies, the largest cohort was men between the ages of 18 and 29, of whom 31% had personal experience.  All of those statistics were significantly larger than what Pew found in its study that was done back in 2015.

If you or your spouse own crypto assets (or if you suspect your spouse does, but you aren’t sure), what should you do in the event of a divorce?  How do you go about finding the assets, valuing them, and dividing them?

The first thing you should do is hire an attorney who has personal, first-hand experience investing or trading in cryptocurrency.  As the Pew Research Poll cited above shows, while a large majority of people have heard a little about Bitcoin, Ethereum, Solana, NFT’s (non-fungible tokens) and others, only a small minority of those people have actually dealt with them.  The concepts, terminology, and mechanisms for buying, selling, and trading are completely foreign to most Americans, and that includes most divorce lawyers.  At Kollias, P.C., we have not only handled numerous cases involving crypto assets, but our firm has also accepted payment in Bitcoin and other cryptocurrencies since 2019.

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Throughout Illinois, thousands of municipal employees have pension benefits through the Illinois Municipal Retirement Fund (abbreviated as “IMRF”).  To the extent those pension benefits are earned while the employee is married, those pension benefits can be divided in a divorce case by way of a special court order known as a Qualified Illinois Domestic Relations Order (abbreviated as “QILDRO”).  A QILDRO is separate from a judgment for dissolution of marriage or a marital settlement agreement, which specifies the rights of each of the parties.  Rather, it is an order directing the IMRF to split the pension benefits in accordance with very specific instructions.

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The Illinois Pension Code contains very specific instructions as to what information a QILDRO must contain in order for the IMRF to comply with the court’s order to divide pension benefits.  In fact, the Illinois Pension Code even includes a sample fill-in-the-blanks form containing pre-printed language and boxes to check.  The IMRF uses the form as specified in the pension code.

Because a QILDRO is a fill-in-the-blanks form, it does not allow many options for the parties to customize the way they divide pension benefits in a divorce case.  Thus, it is possible for there to be a conflict between the terms of a judgment for dissolution of marriage and the terms of the QILDRO that the IMRF must process.  In the event of such a conflict, which terms would control?

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“I will sue you!” is a common phrase meant to inform someone that you will seek legal recourse in order to settle your dispute in court. In the alternative, “I will meet you ‘on the field of battle where I will rend [your] souls from [your] corporal bodies’” is not a common phrase, nor is it a means by which people typically settle their disputes. However, one Kansas man was mad enough to invoke an age-old form of dispute resolution against his former wife and her attorney in a post-divorce case, which was, of course, a motion for trial by combat.

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On January 2, 2020, David Ostrom, 40, of Paola, Kansas, filed a motion for trial by combat with the Iowa District Court in Shelby County alleging, in part, that his ex-wife, Bridgette Ostrom, 38, “destroyed (him) legally.” Such legal destruction being resolved by the possibility of death would seem hardly reasonable to the common layman. However, “to this day, trial by combat has never been explicitly banned or restricted as a right in these United States,” Mr. Ostrom would go on to say that trial by combat was used “as recently as 1818 in British Court.” Not surprisingly, shortly after filing his motion, Mr. Ostrom was quickly faced Ms. Ostrom’s Motion to Suspend Visitation and Motion for Psychological Evaluation.

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Generally speaking, retirement benefits that are earned during the marriage are considered marital property under the Illinois Marriage and Dissolution of Marriage Act. However, determining the amount of spousal retirement benefits that are marital property is often times a central issue to the division of the marital estate upon divorce. In particular, retirement benefits such as a defined benefit plan or a pension can be more complicated to value at the time of divorce, especially where the employee spouse is not yet eligible for retirement.

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A defined benefit plan is a type of retirement plan that accrues benefits usually pursuant to some formula. This formula often will take into account several variables such as salary, length of service, and a multiplier. Because of these variables, the exact amount of the benefit that the employee will receive cannot actually be determined until they retire and the variables become fixed. Sometimes, after a certain number of years of employment, the pension plan may be able to produce an estimate of what the employee will receive upon retirement. However, the accuracy of the benefit amount depends on how close the employee is to actually retiring. Generally, under a defined benefit plan, the benefits are not considered to be “mature” because they depend upon the employee spouse reaching a certain age and they cannot be immediately paid to the other spouse (or “alternate payee” under the plan) at the time of divorce or entry of the Qualified Domestic Relations Order (“QDRO”). So, what do courts do when an employee is not yet eligible for retirement, but a portion (or all) of the pension or defined contribution plan is marital and subject to division upon divorce?

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The dictionary definition of “dissipation” is waste by misuse, to spend or use wastefully or extravagantly, to squander, to deplete.  The definition contained in the Illinois Marriage and Dissolution of Marriage Act refers to a spouse’s wasting of marital assets during while a marriage is undergoing an irretrievable breakdown.  What does that mean?

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In the case of Marriage of O’Neill, the court stated, “dissipation arises when property is improperly used for the sole benefit of one spouse, for a purpose unrelated to the marriage, at a time when the marriage is undergoing an irreconcilable breakdown.”   If a spouse spends marital money frivolously on items or individuals not related to the marriage while the marriage is breaking down, the other spouse may make a claim for dissipation in a divorce. In many cases, this arises when one spouse spends marital money on an extramarital affair, extravagant travel, and/or expensive hobbies, none of which benefit the marriage or family. Often a spouse does not learn of his or her partner’s dissipation until the discovery or information-finding step in the divorce.

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Many couples continue to reside together in the marital residence during divorce proceedings, even when the thought of having to continue to live with their spouse is terribly unpleasant.  This may be especially true when there are children involved.

 

But what happens if the living situation becomes especially sour or openly hostile?  Specifically, what happens when the physical or mental health of one of the spouses, or even one of the children, is at risk?  Section 501 of the Illinois Marriage and Dissolution of Marriage Act provides a remedy for the situation during the pendency of a divorce.

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Divorce litigation affects children, especially if they are living in a contentious atmosphere.  In an effort to minimize the impact of the legal process on children, counties in Illinois have implemented programs and procedures to keep children out of the courtroom, and facilitate resolution of parenting issues in domestic relations cases.  A handful of these programs are summarized here.

 

Mediation

 

Counties in Illinois are required to offer mediation programs for divorcing parents.  If parents are unable to reach an agreement regarding parenting time and the allocation of parental responsibilities, and so long as there are no extenuating circumstances (such as domestic violence), the court will send parents to mediation to try to resolve these issues outside the courtroom.  Judges will often remind parties in a divorce that parents know their family situations and needs best.  As parents, they should take advantage of the opportunity to reach a resolution that is in the best interests of the family, rather than delegating that decision a third party outsider.

 

The mediator does not represent either party and does not give legal advice.  Rather, the mediator’s job is to facilitate conversation between the parties, and hopefully aid them in resolving the matters related to their children.  The mediator will the issue a report stating whether the parties reached a full resolution, partial agreement, or were unable to reach an agreement.


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Section 504 of the Illinois Marriage and Dissolution of Marriage Act addresses maintenance.  The Internal Revenue Service calls it “alimony” on tax forms, and it’s sometimes called spousal support.

 

Under the law, upon the entry of a judgment for dissolution of marriage (a divorce decree), one spouse may be entitled to maintenance, either for a specific duration of time or permanently.  Before awarding maintenance to one spouse, the court must first determine whether an award of maintenance would be appropriate.  Just because the parties have been married a long time or have disparate incomes,that does not necessarily mean one spouse is entitled to maintenance.  Before the court may make a decision about how much maintenance is appropriate and for how long, the law requires the court to first decide whether maintenance is appropriate, after considering the following factors:

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In Illinois, during a divorce, either party can ask the court to order the other party to pay some or all of his or her attorney fees while the case is pending.  Section 501(c-1) of the Illinois Marriage and Dissolution of Marriage Act provides in pre-judgment (pre-decree) divorce cases, the court can assess attorney fees in favor of the petitioning party and against the other party.  The purpose of these interim attorney fee awards is to “level the playing field” and allow an economically disadvantaged spouse to participate adequately in the litigation.  See, Marriage of Rosenbaum-Golden.  This may be necessary where one spouse uses his or her greater control of assets or income as a litigation tool, making it difficult for the disadvantaged spouse.

Pockets Inside Out

If the court decides that one party cannot pay his or her attorney fees but the other party can, it can order that the party able to contribute pay some attorney fees to the other party.  However, if the court determines that both parties do not have sufficient financial ability or access to funds with which to pay, the court will allocate available funds for each party’s attorneys, including any retainers or interim payments previously paid.

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When going through a divorce, one thing parties are tasked with is dividing the marital estate.  This involves dividing marital assets, and allocating the responsibility of marital debts as well.  Debt that is incurred during the marriage is presumed marital.

Student Loan Debt

But what if the debt is for student loans incurred by only one party during the marriage?  At first blush, it may not seem fair to require the spouse working during the marriage to be responsible for the student’s loans, or even be responsible for a portion of them.  At the same time, the student may not have income, or may have pursued his or her degree relying on the working spouse’s representation that he or she would help pay the loans.

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