Possible strategies for protecting yourself from high inflation rates during divorce
By Blake Austin Culver
Housing costs, food prices, fuel charges—daily living expenses have been increasing with high inflation rates not seen in over 40 years. With high inflation rates, it takes more money to buy the same goods and services. In Illinois, if high inflation rates may impact your dissolution of marriage case, including child support, maintenance, and/or property distribution, what are some possible strategies for protecting yourself from inflation?
When determining child support and/or maintenance during divorce, it is crucial to have the parties’ accurate income and expense amounts. Accurate income and expense amounts, supported by documentary evidence, such as income tax returns, pay stubs, and banking statements are required for financial affidavits, including under Section 501 of the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/501). High inflation rates may affect or alter the parties’ income and/or expenses. While child support and/or maintenance amounts are usually determined by the incomes of the respective parties, whether an argument may be made to the court for including a cost-of-living adjustment (COLA) in a divorce decree should be carefully considered.
For property distribution during divorce, high inflation rates may affect or alter asset and debt values, including for closely held businesses deemed to be marital property. Several approaches and/or procedures for valuing a closely held business are provided in Section 503 of the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/503). During high inflation rates, a closely held business may have greater costs, which could impact its net profit and overall valuation, especially if there have not been equivalent sales price increases. Usually, during the pendency of a dissolution of marriage case, a qualified expert could be retained to determine the fair market value of any closely held business, subject to equitable distribution. If you have any questions regarding additional possible strategies for protecting yourself from high inflation rates during divorce, contact the law firm of Gardi, Haught, Fischer & Bhosale Ltd. You may request a free case evaluation by clicking on the button below.